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FoxConn Freezes Hiring On iPhone Production Slowdown

Tyler Durden's picture


First it was Walmart letting the truth finally slip last Friday when a leaked memo showed recent sales are a "total disaster." Today, as anyone who has looked at AAPL premarket quotes will surmise, it's Apple's turn, following a report in the FT that FoxConn, the world's largest contract electronics manufacturer, "has imposed a recruitment freeze across almost all of its factories in China 5th as it slows production of Apple's iPhone." It is not an internal memo, but in this particular case actions speak even louder than leaked words: 'The suspension in hiring by China's largest private sector employer, and the biggest assembler of Apple products, is the first search countrywide move since the 2009 downturn, prompted by the financial crisis. It underscores the weakening demand for some Apple products, Which has put pressure on the American company's battered share price. "Currently, none of the plants in mainland China have hiring plans," said Liu Kun, a company spokesman at Foxconn's largest manufacturing facility in the southern Chinese city of Shenzhen."

So first Walmart, the world's largest private sector employer with over 2 million workers, and now FoxConn, the world's largest tech-focused employer with 1.2 million workers, is also realizing what a cashless, consumerless "recovery" means, regardless whether it is due to Apple or not. And the markets still continues to wave it off as one off events.

Human resources officials at Foxconn's largest factories, local government officials and external recruiters working with the company said there had been internal notices on Tuesday and Wednesday to stop hiring until at least the end of March, 5th in response to reduced orders for the iPhone


Apple did not respond immediately to a request for comment, but Tim Cook, chief executive, told a conference last week that he did not think demand for iPhones was peaking. "We do not have the word 'limit' in the Apple vocabulary. . . I see a [smartphone] market that's incredible to be in. Maybe one of the best markets of all time, "he said.


However, at external recruiter in the northern province of Shandong, who identified himself only as Mr. Zhang, said Foxconn's demand for workers this year was as low as that in 2009.


The company's work force in China was estimated at about 800,000 during the 2009 crisis, but rose to 1.2m last year ahead of the launch of the iPhone 5 Workers' tenure at the company is less than 13 months on average, according to a person close to the company. This suggests that head count at Foxconn could fall by least of thousands if it stopped hiring for a month and its turnover of workers Remained as high as last year


Recruiters said hiring has stopped for the iPhone and iPad production lines in Shenzhen, the company's largest plant with more than 200,000 workers, as well as at Zhengzhou, the second-largest with about 200,000 workers, Which therefore makes iPhones. Taiyuan, Which had 79.000 workers as of September and makes iPhone parts, and Chengdu, Which makes the iPad were, thus putting a freeze on hiring.

As for Apple's demand-driven issues, those are very well known:

The move follows a recent decline in sales at Apple suppliers . "In January, Apple's supply chain-related gene names rally delivered a slowing sales momentum due to the sluggish shipments of MacBook, iPhone 5 and iPad during the holiday season," Nomura said in a research note this week.


Hon Hai, the Taiwan-listed flagship of the group Which uses the trade name Foxconn reported, at 8 per cent sales decline last month, and Quanta Computer , the world's largest notebook contract manufacturer and therefore at Apple supplier, saw sales drop 16 per cent .

Fear not: all shall promptly be well once FoxConn clarifies it wasn't really Apple's fault and the end-demand collapse was all due to Sandy, snow, meteors, the sequester and Bush. All in that order.

And now, back to your algorithmic, Fed-ordained stock "market" ramp, where news of global recession should be enough to lift the S&P by at least 10 points.

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Wed, 02/20/2013 - 08:59 | 3258897 ZeroAvatar
ZeroAvatar's picture

A hiring freeze at a factory in CHINA? That IS significant!  No one thought CHINA could EVER slow down.

Wed, 02/20/2013 - 09:04 | 3258901 GetZeeGold
GetZeeGold's picture



The ghost cities have been frozen in time as well.....not sure what it means.


Wed, 02/20/2013 - 09:13 | 3258924 Careless Whisper
Careless Whisper's picture

Does this mean less suicide nets -- or more?

Wed, 02/20/2013 - 09:32 | 3258965 Zer0head
Zer0head's picture

just remove the nets

problem solved

Wed, 02/20/2013 - 09:57 | 3259008 GetZeeGold
GetZeeGold's picture



Could always just install them at the southern border.

It could possibly pull McCain's pregressive ass out of the fire. Looks like the citizens of Arizona have finally figured out that he was never a conservative.....and he might have lied about being a Republican too,



Wed, 02/20/2013 - 10:02 | 3259033 Freddie
Freddie's picture

McCain is a lying POS.  The residents should file a recall on him now.

Foxconn should go into the ammo business along with Apple.   No one wants that iPhone shit anymore.  People want i.223 and i9mm and even i.22LR.

Wed, 02/20/2013 - 10:31 | 3259105 TruthInSunshine
TruthInSunshine's picture

Just think, if it's getting to this point as of now, what will happen when Foxconn replaces 1/2 of all workers with robots (aka "automatization"), as is its executive 3 year plan?

Wed, 02/20/2013 - 11:15 | 3259307 MachoMan
MachoMan's picture

Yeah, but they need to make brass cased ammo instead of that usual steel cased commie shit...  Not worried about it running through an AK (hell, the damn thing is lubricated by dirt), but for some other firearms, I'd much rather run only brass through them...

Wed, 02/20/2013 - 10:05 | 3259043 bank guy in Brussels
bank guy in Brussels's picture


« Does this mean less suicide nets -- or more? »

One thing that will now definitely be 'more',

Is more articles from Reggie Middleton about how he was 'right' about Apple

Wed, 02/20/2013 - 11:18 | 3259326 Midas
Midas's picture

I think Reggie is going to show some restraint and humility and let others sing his praises. 



Wed, 02/20/2013 - 11:26 | 3259373 Ying-Yang
Ying-Yang's picture

"We do not have the word 'limit' in the Apple vocabulary. . ."

A CEO full of mottos and wisdom? Fucktard CEO making big bucks for what?

Thu, 02/21/2013 - 16:11 | 3264524 thisandthat
thisandthat's picture

That's it! They're not hiring because they fixed employee suicide - should start licensing employees, now!

Wed, 02/20/2013 - 09:34 | 3258972 Navymugsy
Navymugsy's picture

I believe that it is now illegal to use the words "China" and "slow" in the same sentence. DHS will be with you shortly...

Wed, 02/20/2013 - 09:37 | 3258977 JPM Hater001
JPM Hater001's picture

Hey Zero

I didnt think it would so much slow down as fall apart.  It was made in China after all.

Wed, 02/20/2013 - 09:40 | 3258985 Banksters
Banksters's picture

I remember when some Americans boycotted goods made in sweatshops.  Now they camp out to buy the next iteration of ishit.

Wed, 02/20/2013 - 11:15 | 3259311 Shizzmoney
Shizzmoney's picture

Consumers' choices have alot to do about that.

Want to buy textiles at a small biz?  You'll probably have a better time finding a needle in a haystack (Made in China and sold at a Costco or Wal-Mart).

Do you buy Samsung/HTC product over Apple because of its use of FoxConn slave labor?  Those companies employ workers at almost as bad of a wage in the Korean DMZ.

There's even legislation that prevents those in grocery stores to separate which food is GMO and which isn't.  Now listen, you can sell me the GMO food - just let me have the visibility of knowing which is the mutant food and which isn't (so I know which one NOT to buy - I'll pay more, I don't care).

The thing is: we have Americans all the time, especially those on the right, say we are "decending into Communism".  Yet we buy products that prop up....a Communist country.  We have trade policies that make their economy "stronger" (sic).

Yet the American consumer continues the charade of hypocrisy at the cashier counter.  Neofeudal serfdom will NOT stop until we stop pulling out the wallets for this crap.





Wed, 02/20/2013 - 09:01 | 3258900 Lost Wages
Lost Wages's picture

But, but, what about all the "growth"?

Wed, 02/20/2013 - 09:37 | 3258979 JPM Hater001
JPM Hater001's picture

It was in your pants

Wed, 02/20/2013 - 09:04 | 3258902 847328_3527
847328_3527's picture

Partee's over?


BEIJING - China's cabinet on Wednesday restated its intention to extend a pilot property tax program to more cities and urged local authorities again to put price control targets on new homes, in the latest effort to calm frothy real estate markets.




Wed, 02/20/2013 - 09:45 | 3258994 youngman
youngman's picture

They will buy more gold and silver then....real estate is a savings vehicle for them....

Wed, 02/20/2013 - 09:03 | 3258903 mayhem_korner
mayhem_korner's picture



Maybe that's why the U.S. UE rate is "7.9%" - layoffs are being exported.  /s

Wed, 02/20/2013 - 09:20 | 3258936 ParkAveFlasher
ParkAveFlasher's picture

What is sarcasm to you is bona fide methodology to others.  Decent people recognize dark humor, the sociopathic see means to insane ends.  +1 because it is true, that is very likely in their calcuation.

Wed, 02/20/2013 - 09:33 | 3258967 Shizzmoney
Shizzmoney's picture

The best comedy is always rooted in truth.  And usually DARK truth:

"Tragedy is when I cut my finger. Comedy is when you walk into an open sewer and die."

- Mel Brooks

Wed, 02/20/2013 - 09:04 | 3258905 Jason T
Jason T's picture

June of 1999, I worked for a ciruit board manufacturing company.. we had about 1/4 of the order of Intels CPU product.. and just like that, they cancelled it on us.  That product made up like 20% of our revenue.  The insane overtime we were working got hit ..  soon after that, layoffs, pay cuts, more layoffs.. then bust.


Wed, 02/20/2013 - 09:36 | 3258974 Navymugsy
Navymugsy's picture

You and I must have been in the PCB industry at the same time. Ouch!

Wed, 02/20/2013 - 09:55 | 3259010 Jacque Itch
Jacque Itch's picture

Exact same thing has been happening with Plexus (PLXS) for the last 6 months.  Big trouble.

Wed, 02/20/2013 - 12:24 | 3259706 SoCalBusted
SoCalBusted's picture

Most EMS rely on just a handful of customers for 80% of their business.  Scary model.

Wed, 02/20/2013 - 09:04 | 3258906 Oh regional Indian
Oh regional Indian's picture

The new economy hurtles downhill on the edge side of a serrated blade.

When the foxconn guards the iHen, your golden goose is cooked, if you'll forgive the hashed brown metaphor.


Wed, 02/20/2013 - 09:05 | 3258908 jubber
jubber's picture

Foxconn says recruitment freeze not related to Apple (AAPL) Iphone 5 slowdown

Wed, 02/20/2013 - 09:13 | 3258925 GetZeeGold
GetZeeGold's picture




Wed, 02/20/2013 - 09:25 | 3258946 Lost Wages
Lost Wages's picture

Like they're saying the amount of widgets they sell has no influence on the amount of people they hire. I suppose all the Dell sales are making up for the lack of Apple sales?

Wed, 02/20/2013 - 10:14 | 3259048 mendigo
mendigo's picture

According to SA this was planned and previously anounced
and related to some planning constraints. Time will tell.

Interesting hypothetically how an error in reporting may flushout
the amatuers and half-wits and misfits. Better to remain silent...

Wed, 02/20/2013 - 09:04 | 3258909 Dr. No
Dr. No's picture

I guess they will just let employee suicide provide adequate rate of RIF?

Wed, 02/20/2013 - 09:26 | 3258949 Shizzmoney
Shizzmoney's picture

Those nets ain't there to celebrate the career of Yao Ming......

Wed, 02/20/2013 - 09:26 | 3258951 Lost Wages
Lost Wages's picture

Right, they will remove the nets for 10 days and let nature take its course.

Wed, 02/20/2013 - 13:28 | 3260007 ParkAveFlasher
ParkAveFlasher's picture

I think they call that "attrition" in the HR parlance.

Wed, 02/20/2013 - 09:08 | 3258913 booboo
booboo's picture

"Let My People Go"


Wed, 02/20/2013 - 09:11 | 3258921 mayhem_korner
mayhem_korner's picture



Moses was the messenger of those words, not the author. (Exodus 9)

Wed, 02/20/2013 - 09:32 | 3258966 Terminus C
Terminus C's picture

If "He" created the earth... then wouldn't the Egyptians also be "His" people...?

"There's an invisible man... and he lives in the sky..."

Wed, 02/20/2013 - 09:50 | 3258999 mayhem_korner
mayhem_korner's picture



All people are God's people, yes.  Some reject the gift, others humbly receive it.  But the Hebrews were the "chosen" people because Christ came through their lineage.  The historical books of the OT are, in part, about God's preservation of the line that yielded Jesus.   That is what was going on in the Exodus - the chosen people were in bondage and God delivered them. The Hebrews were no more upstanding than others of their day, as evidenced over and over and over in the OT.  Their conduct is not what made them the "chosen" people.

Interesting that Egypt - the most powerful nation on the planet in 1900 B.C., has been reduced to at best a second-rate nation ever since the Exodus.

Wed, 02/20/2013 - 09:09 | 3258915 John Law Lives
John Law Lives's picture

How long before Chairsatan dispatches Kevin Henry to start placing orders for iPhones?  Got to keep the mirage going...


Wed, 02/20/2013 - 09:13 | 3258923 mayhem_korner
mayhem_korner's picture



Or just have iPhones installed into Government Motors cars - then they can boost "sales" by iStuffing the iChannels?

Wed, 02/20/2013 - 09:28 | 3258957 edb5s
edb5s's picture

I am picturing a WB7 rendition of Kevin (or even the Bernanke, maybe both) running out of the NYC Apple store holding as many iphones as he/they can.

Wed, 02/20/2013 - 09:09 | 3258916 cliffynator
cliffynator's picture

In my head I changed the company spokesman's name to Liu Kang. "FINISH HIM!"

Wed, 02/20/2013 - 09:10 | 3258917 cliffynator
cliffynator's picture

Oops double post.

Wed, 02/20/2013 - 09:11 | 3258920 Sudden Debt
Sudden Debt's picture



OH MY GOD!!!!!



Wed, 02/20/2013 - 09:14 | 3258926 mayhem_korner
mayhem_korner's picture



With the possible exception of brothels...

Wed, 02/20/2013 - 09:21 | 3258940 Desert Irish
Desert Irish's picture

well done sir...

Wed, 02/20/2013 - 09:25 | 3258945 Shizzmoney
Shizzmoney's picture

Brothels are recession proof - although the price of Grade B pussy is deflating.

Wed, 02/20/2013 - 09:41 | 3258987 bunnyswanson
bunnyswanson's picture

Some never get over the fact mother broke you and father let her.  Oops. 





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