Jobs freeze at Foxconn factory
01:02 UTC+8 February 22, 2013
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APPLE Inc's manufacturing partner Foxconn Technology Group has frozen hiring at a Shenzhen plant that makes gadgets including the iPhone 5 and put the brakes on recruiting for other factories across China, but said the move was not linked to any single client.
Foxconn, which runs a network of factories in the world's second largest economy making products for companies from Hewlett-Packard to Dell, sought to pour cold water on a Financial Times report that it had imposed a hiring freeze while slowing production of Apple's latest smartphone.
"Due to an unprecedented rate of return of employees following the Chinese New Year holiday compared to years past, our company has decided to temporarily slow down our recruitment process," the company said in a statement.
"This action is not related to any single customer and any speculation to the contrary is false and inaccurate."
Like other Chinese contract manufacturers, Foxconn relies on a large number of migrant workers from across the country. They journey home for the most important holiday of the year but many do not make it back to work afterward. However, Foxconn spokesman Louis Woo said this year up to 97 percent of employees had returned.
The Shenzhen plant "is not hiring at the moment because workers' return rate after Chinese New Year is very high this year," Woo said. "We replenish each year depending on the return rate."
Apple sold a less-than-expected 47.8 million iPhones in the 2012 holiday quarter, fanning fears that its dominance of consumer electronics is on the wane as Samsung Electronics Co and other manufacturers that use Google Inc's Android software gain market share.
Apple watchers often take cues from its component suppliers and manufacturing partners. In January, CEO Tim Cook took the unusual step of warning investors that it is difficult to extrapolate from limited "data points."
RBC Capital Markets estimates that just 70 to 80 percent of Chinese workers return to factories it tracks.
"This year we believe the return rates have been closer to 90 percent, which may minimize the need to hire," said analyst Amit Daryanani. "Given the timing of the freeze, it may have more to do with higher return rates of employees versus what was expected by Foxconn and other supply chain companies."
Another Foxconn spokesman, Liu Kun, was quoted by the newspaper as saying: "Currently, none of the plants on Chinese mainland has hiring plans."
Foxconn, which runs a network of factories in the world's second largest economy making products for companies from Hewlett-Packard to Dell, sought to pour cold water on a Financial Times report that it had imposed a hiring freeze while slowing production of Apple's latest smartphone.
"Due to an unprecedented rate of return of employees following the Chinese New Year holiday compared to years past, our company has decided to temporarily slow down our recruitment process," the company said in a statement.
"This action is not related to any single customer and any speculation to the contrary is false and inaccurate."
Like other Chinese contract manufacturers, Foxconn relies on a large number of migrant workers from across the country. They journey home for the most important holiday of the year but many do not make it back to work afterward. However, Foxconn spokesman Louis Woo said this year up to 97 percent of employees had returned.
The Shenzhen plant "is not hiring at the moment because workers' return rate after Chinese New Year is very high this year," Woo said. "We replenish each year depending on the return rate."
Apple sold a less-than-expected 47.8 million iPhones in the 2012 holiday quarter, fanning fears that its dominance of consumer electronics is on the wane as Samsung Electronics Co and other manufacturers that use Google Inc's Android software gain market share.
Apple watchers often take cues from its component suppliers and manufacturing partners. In January, CEO Tim Cook took the unusual step of warning investors that it is difficult to extrapolate from limited "data points."
RBC Capital Markets estimates that just 70 to 80 percent of Chinese workers return to factories it tracks.
"This year we believe the return rates have been closer to 90 percent, which may minimize the need to hire," said analyst Amit Daryanani. "Given the timing of the freeze, it may have more to do with higher return rates of employees versus what was expected by Foxconn and other supply chain companies."
Another Foxconn spokesman, Liu Kun, was quoted by the newspaper as saying: "Currently, none of the plants on Chinese mainland has hiring plans."
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