One of the world’s biggest private employers, Foxconn, a company that has more than 1.3 million workers in peak seasons, will cut its workforce, according to information leaked to Reuters.
The announcement comes on a day when Apple is preparing to announce maybe the biggest iPhone sales in history. Wall Street’s expectations are high, with some analysts leaning towards the 70 million mark, which compares to the 51 million units reported for fiscal Q1 2014.
In addition, the demand for the iPhone has remained high throughout the current calendar quarter – if we can believe market research firms – so you’d expect Foxconn to be expanding its workforce instead of shrinking it.
However, special assistant to the chairman and group spokesman Louis Woo didn’t specify a target or timeframe for the reduction. He instead pointed to rising wages – labour cost has more than doubled since 2010.
“We’ve basically stabilized (our workforce) in the last three years,” Woo said. When asked if the company plans to reduce overall headcount, he responded “yes”.
The problem, apparently, is the slowing growth of sales and the falling prices of the gadgets Foxconn manufactures. Without any specific details, however, the information is vague enough to leave plenty of room for wild speculation. This might, for instance, signal the end of the peak production period, and that everything will soon be back to normal, until the next cycle.