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.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
ZeroAvatar's picture

"Kiss me where it stinks", she said.  (Drives her to New Joisey) That was funny!

vato poco's picture

I fully expect the number of hard-up LA secretaries & receptionists who drive up to Vegas for a weekend of lite hooking to climb. Not that that's a bad thing, mind you. Semi-pro ass is reasonably priced; usually a lot of fun; and the gals are actually kind of cheerful.

Acet's picture

Even brothels diversify into serveral "services" and "flavours", not to mention "combinations".

Sudden Debt's picture

Yes, but that's the "SERVICE" sector.


I am a Man I am Forty's picture

Don't tell coke and mcdonalds.  $137B in cash, what dumbasses, you wouldn't have thought that apple just had the best quarter in the history of the world if you take into account the minus one week for the quarter.

Can't believe iPhone sales are slowing after the holiday quarter.  That's NEVER happened.  Geez, CNBC and ZH thick as thieves with the apple bashing.

John Law Lives's picture

This is an excerpt from the article you referenced:

"A worker at the Henan Employment Center said the recruitment suspension might have something to do with the diminished output of the iphone 5."

jcaz's picture

LOL- tad bitter about not selling at $700, are we?

Sudden Debt's picture

THOSE are PROCESS suppliers.

APPLE is a ELECTRONIC supplier.

Totally different business :)


You must be a Apple "investor" that just came in from the Yahooollloooollloo board :)



dobermangang's picture

The only things selling well right now are guns, ammo, booze and lottery scratch-offs.  We live in interesting times.


NEOSERF's picture

Make no doubt about it...these "leaks" will continue all week until our glorious leaders fold like a cheap lawn chair and punt on sequestration...All a coordinated attempt to provide soundbites for our Congressmen to lob at eachother.

espirit's picture


There, fixed it. 

edb5s's picture

The beatings will continue until morale improves...

espirit's picture

...and, the layoffs will continue until everyone is employed.

Crassus's picture

If they can only keep it all together until the Sequestration event can be blamed. The media is doing its job by apportioning blame to congress and the president equally.

GetZeeGold's picture



Even with that we'll eventually add 7 trillion to the debt.


Boenher will cave under the massive ad campaign featuring scores of children. You know he'll cave and stab a knife in those kids backs.

mayhem_korner's picture



Have you ever seen the Wile E. Coyote/roadrunner skit where the coyote puts up a tiny umbrella just before a giant boulder crushes him?  Sequestration is that little umbrella...irrelevant.

Shizzmoney's picture

It is so amazing how all of this happens and yet the populace in America just ignores the reality of the bullshit that is crumbling amongst us.

This is also reflective in the fact that the cost of living in China is up.  Therefore, workers who usually would "punt" after working 6-18 months at this slave shop, are coming back to work - because they NEED the fuckin' money.  But it ain't there, b/c the Americans who buy their crap - don't have any to buy the cheap shit they make.

BTW, I still have no idea why people "fear" China.  They suppress speech.  They kill innocent women, children.  I mean, our military does it too.......but these Communist small dicked fucks do it to their OWN people.

China will go the way of Venezuela of the 1960's.  I wonder what will Tim Cook do then?

dobermangang's picture

The next iPhone should be made of gold and silver with the ability to shoot bullets.  It would be a best seller.

StychoKiller's picture

"The Man with the Golden Phone", sounds like a BlockBuster! :>D

q99x2's picture

The roaring teens. 90 years of bankster market manipulations. Wake me when the wars start.

This time things should be interesting since UFOs are involved.

You know the damn president has been checking out his bunker during his vacation. Maybe we'll get lucky and he won't return.

espirit's picture

Talked with a couple of people over dinner last night, and they're actually looking forward to having fridays off for the next 26 weeks.

Manna from heaven, they said.

Oops, wrong thread (hehe).

Sudden Debt's picture

Talked with a couple of people over dinner last night


venturen's picture

Maybe Apple could print paper Iphones and declare that a product? Stock would triple!

dobermangang's picture

With gas prices skyrocketing up 51 cents in just 2 months, they'll be a lot of consumer products sitting on the shelves collecting dust.

pods's picture

Just wait till they have to bring the summer blends online.


Super Broccoli's picture

China has so far supported or ill economies but if their great leaders feel cornered by an angry population due to a falling agregate demand ... well they might set up that gold standard once for all !

yogibear's picture

This is a clear indication Apple is loosing it's shine.

youngman's picture

i bet production in the FAKE IPhone factory is booming....China has no problem doing that....

forwardho's picture

"We do not have the word 'limit' in theApple vocabulary"

Pure hubris.

Unlimited exponential growth... Forever?

 Are we living now in a world where even the Laws of physics are denied?

ZeroAvatar's picture

I guess those Foxxconn workers will just have to get used to eating those new 'Polo'TM  brand steaks.

StychoKiller's picture

"Wolf's heart and Dog's lungs" means totally useless to the Chinese.

Cardinal Fang's picture

I thought that meant the secret formula for wonton filling.  

bugs_'s picture

whereever you find economic misery - you'll find a central bank

earleflorida's picture

the three amigos... iran, n. korea, and cuba

please note: creepy site, but the facts checked out...

earleflorida's picture

'China Mobile... a generational-leapfrog out of time and place, replacing America's AT&T as the world's most monopolistic behemoth?! Who'd known? 

Does a tired/tried? and old heuristic/hubris? USSA ,really want to go toe-too-tow? with the 'newly self-ordained world superpower'?, over cyber [industrial sabotage/ IP Theft?] criminality/ security???

'LTE-A: Trailblazing Towards 4G' ___ 'Cloud Radio: The Best Choice in the 4G Era' ___ 'China Mobile Hong Kong: A New Milestone in 4G LTE'

Note:  Is Japan really worth the trouble, and who gives a fuck about old-europe-- and a anachronistic Trilateralist`Montage!? 


thankyou Tyler

ZeroAvatar's picture

Welcome to  Chinese 'Year of the Horse'.

Artful Dodger's picture

Is this the same story as the horse meat story? I can't keep them straight.

monopoly's picture

Ahhh, you are all getting to upset about this news. WalMart, Apple, company specific, not a problem, just neighborhood stores. Buy AMZN, word has it their PE will lower to 400 next quarter. Oh, and continue to sell your gold. No need for that anymore. 

Beyond words.

Yes_Questions's picture



"yes sir, I'll go whip worker 1138-iTHX" said Chang as he realized he loved Big Brother Bing..

edifice's picture

So... People really aren't buying iCrap with student loans? Which is it, Tyler?

CaptainSpaulding's picture

Hmmmm, Good point. This is a good topic for The things the that make you go hmmmm segment

moneybots's picture

"And the markets still continues to wave it off as one off events."


This morning i hear that the DOW is 150 points from an all time high.  The goal is a headline.  "DOW Sets Record High".

In 2007, the recession began in December.  The Dow was jumping to get to 14,000, in October, just 2 months before the recession began.  The top should have happened some months before, according to "the market leads the economy by 6 to 9 months" mantra.

The market isn't a leading indicator, the market is a manipulation.  "Nothing can knock this market down, not even interest rates."  "Nothing can knock this market down, not even high oil prices."  Those are near quotes from 2007 from CNBC on the floor of the NYSE.  The market was then knocked down 57% on the S&P.

When the market ignores news, after the inflection point is hit, it pays attention to it with a passion, as it has to catch up with where it should have been if it was actually leading the economy.



resurger's picture

A saturated iphone market is BULLISH!!!!!!!!!!!!


moneybots's picture

"FoxConn, the world's largest tech-focused employer with 1.2 million workers"

Hiring freeze.  Over Apple iPhone sales.  I thought Foxconn was supposed to be installing 1 million robots over the next few years.  What is that going to do to hiring at Foxconn?

Rathmullan's picture

Wow! And the Samsung Galaxy S IV is still an eternity (2 months) away from hitting the shelves.

Son of Loki's picture

Foxconn in the Freezer business? I never could have guessed.