14 DAY TRIAL // Foxconn is planning to shrink its workforce considerably, “as the Apple Inc. supplier faces declining revenue growth and rising wages in China,” company insiders told Reuters. The conglomerate will also move forward with plans to replace much of the workforce with machines.
Foxconn employs roughly 1.3 million workers at peak times, such as when Apple needs millions of iPhones for a new launch, but since labor costs have more than doubled since 2010, the Taiwanese electronics manufacturer is forced to cut down on staff.
Technology is getting cheaper every year
Louis Woo, special assistant to the Chairman and group spokesman, reveals that while employees demand bigger wages, the very devices that Foxconn ships become cheaper and cheaper every year. For instance, the average smartphone will sell for 19 percent less in 2018.
“We've basically stabilized (our workforce) in the last three years,” Woo said. Asked if Foxconn will lay off staff or hire less people in the future, he confidently states “yes.”
Another reason why Foxconn is going down this path is automation. Woo said robots would be essential to keep labor costs down, and plans to perform tasks currently done by workers using robotic arms.
iPhone 7 made by machines may spell trouble
Apple is renowned for caring deeply about how its iPhones are assembled and shipped, and may be reluctant to use fledging automated technologies to assemble its precious iDevices. While robots are used in countless manufacturing processes across virtually every major industry, Apple requires a level of accuracy that cannot be achieved without human input.
It remains to be seen just how many operations will be handled by robots, and how many will be left to employees.