Hon Hai Precision Industry Co (鴻海), the world’s largest contract electronics manufacturer, yesterday denied media reports that it in October last year begun massive layoffs at its Chinese plants to cope with one of the most severe downturns in the smartphone industry in a decade.
Workforce adjustments at facilities are a routine part of operations based on shifts in global strategy and client needs, Hon Hai said in a filing with the Taiwan Stock Exchange, adding that it aims to hire 50,000 workers at its Chinese campuses.
The company, a primary assembler of Apple Inc’s iPhones, said that it remains committed to preparing workers for a transformation toward industrial Internet and smart manufacturing technologies.
The announcement came after a highly cited Nikkei report on Friday last week that said the company has sacked 50,000 seasonal contract workers at its most important iPhone factory in Zhengzhou, Henan Province, and is looking to cut a total of 100,000 jobs.
While the scale of the layoffs is not larger than the previous years, it began significantly earlier, in October, as opposed to mid-to-late January to coincide with the slow season for iPhone production, as slower-than-expected demand for Apple’s latest flagship smartphones has sent chills across the supply chain, the report said, citing industry sources.
Adoption of automation and improved efficiency might have also contributed to the job cuts, the report said, adding that Hon Hai is in the middle of an aggressive cost-cutting program.
Hon Hai reported that revenue last month dropped 8.27 percent sequentially to NT$619.32 billion (US$20.05 billion), while Pegatron Corp (和碩), another key iPhone assembler, saw its top line in the period tumble 39 percent sequentially to NT$105.75 billion, its poorest showing in five months.
Still, Hon Hai saw its aggregate revenue last year rise 12.51 percent annually to NT$5.29 trillion, while Pegatron posted a 12.26 percent annual gain to NT$1.3 trillion.
Pegatron, smartphone lens maker Largan Precision Co (大立光) and case maker Catcher Technology Co (可成), as well as touchpanel suppliers TPK Holding Co (宸鴻) and General Interface Solution (GIS) Holding Ltd (業成控股), have told their workers that there would be no overtime required over the Lunar New Year holiday, which begins on Saturday next week.
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