Early layoffs also occurred downstream of Foxconn's supply chain. According to another person familiar with the matter, a Shenzhen-based supplier of spare parts required 4,000 employees to take "vacations" from October last year to March this year:
"The company has not voluntarily dismissed these employees. It will decide whether to lay off staff after March 1.
At the same time, in addition to early layoffs of contract workers, Foxconn also hopes to reduce managers and backstage technicians by merging departments. Nikkei quoted people familiar with the matter as saying that the company will produce apples recently.MacBookandIPadThe business unit is merged with another unit that produces laptops and desktops for Dell and Acer.
With consumer demand for Apple's mobile phones showing a weak trend, data show that Apple has cut its production by about 5 million units on the basis of Foxconn's original order demand. According to a rough calculation of Foxconn's production capacity, the reduction is equivalent to a full-line capacity load of one week.
In addition, according to the previous internal outflow of Foxconn memorandum, Foxconn will significantly reduce expenditure in 2019, possibly up to 50%, about 20 billion yuan ($2.9 billion), because it will face a "very difficult and competitive year".
The memo states that the company will be in business next year.IPhoneBusiness needs to reduce 6 billion yuan of expenditure and plans to reduce non-technical personnel costs by about 10%, compared with the company's expenditure of about $6.7 billion over the past 12 months.
At the same time, Foxconn also plans to cut its A-share-listed Foxconn Industrial Internet Company (IFU) spending by 3 billion yuan.
For cost reduction, Foxconn responded that the cost reduction was mainly aimed at the unqualified units in the group's operating performance and the outward investment whose profit performance was not as good as expected. It also involved peripheral costs such as administration, affairs and logistics, but excluded the group's R&D and new products.DevelopmentFunds. Moreover, Foxconn will increase its R&D expenditure according to the global layout and regional characteristics.
Foxconn's cost-cutting plan may be related to the vigorous implementation of the "machine-to-person" program in recent years to reduce human costs.
In a prospectus issued in June last year, the Federation disclosed that the number of employees in the company was 269,000, of which 209,000 had undergraduate education, accounting for nearly 80 percent. Among the company's 27 billion yuan fund-raising investment, 5.108 billion yuan will be invested in high-end mobile phone precision parts intelligent manufacturing, unmanned factory expansion projects.
Guo Taiming, chairman of Hon Hai Group, also disclosed that Hon Hai decided 10 years ago to replace manpower with robots. The company plans to cut 80% of its workers within five years.
"If you can't do it in five years, you can do it in ten years, because technology is already here."