Hon Hai Group (鴻海集團) chairman Terry Gou (郭台銘) said yesterday the economic downturn was three times worse than expected, and the company would reduce its worldwide workforce in response to deteriorating conditions.
Gou’s remark came amid mounting speculation that the world’s largest contract maker of electronics, along with its wireless networking equipment affiliate Cybertan Technology Inc (建漢科技), will both trim between 10 percent and 15 percent of their workforces, the Chinese-language Liberty Times (the Taipei Times’ sister paper) reported yesterday.
The report said Hon Hai’s Hong Kong-traded unit Foxconn International Holdings Ltd’s (富士康國際) planned to axe 1,500 staff at its Hungarian plant, and reduce its workforce at its Chinese operations by 5 percent, or between 30,000 and 40,000 people.
PHOTO: LIAO CHEN-HUEI, TAIPEI TIMES
“Hon Hai’s job cuts plan is global due to the harsh economic conditions,” Gou told reporters yesterday at a charity event.
He did not specify the number of cuts.
A local Hon Hai engineer axed by the company, however, told the Taipei Times that around 70 Taiwanese employees lost their jobs yesterday, accounting for about 10 percent of the company’s 600-person workforce in Taiwan.
The engineer, who wished to remain anonymous, said the company gave no previous hint that it would slash local manpower, adding that yesterday’s cut could be just the beginning of a series of job cuts at the company.
Shares of Hon Hai have plunged 64.78 percent so far this year to close at NT$68.5 yesterday.
Gou told reporters that a reduction in the workforce was necessary for businesses to cope with the global slump, otherwise the company could lose its competitiveness.
Losing competitiveness would come at a heavy price if a firm ended up having to ask the government for a bailout, he said.
Gou said that even Japan’s largest automaker, Toyota Motor, which is known for its high efficiency and sound operations, was recently forced to announce a large workforce reduction in a bid to weather the global economic storm.
Yesterday Gou made the single largest donation of NT$15 billion (US$461.11 million) to National Taiwan University Hospital’s cancer center, as part of his pledge to donate most of his assets to charity.
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