Beleaguered Apple supplier Foxconn has announced it will cut back its workforce.
Special assistant to the chairman and group spokesman Louis Woo revealed the news in an exclusive to Reuters, although he did not specify when or how deep the cuts to the Taiwanese electronics manufacturer’s workforce would be.
He suggested increasing automation would be important to the company in future.
The news comes as declining revenue growth alongside rising labour costs have squeezed the company’s margins. Revenue growth sat at 6.5% in 2014 after consistent growth of over 10% from 2003-2012. The fall is attributed to a decline in smartphone prices and a general slowdown in the growth of the smartphone market.
Meanwhile, Foxconn’s employment costs have risen twofold since 18 attempted worker suicides in 2010 prompted media scrutiny of the company’s allegedly abusive practices. The manufacturer’s plant in Chennai has seen agitation as recently in December and January.
Following reports, Foxconn contacted CBR with the following statement:
"Foxconn wishes to clarify that a media report that alleges that our company is reducing its workforce is completely inaccurate and totally without foundation. We continue to recruit employees to support our business and operations globally and we continue to maintain a workforce of over one million employees worldwide. As we have long said, Foxconn is investing in the automation of many of the manufacturing tasks associated with our operations, applying robotic engineering and other innovative manufacturing technologies to enable our employees to focus on high value-added elements in the manufacturing process. As we continue to increase the application of automation in our operations, the magnitude of our employee recruitment is expected to decrease in the years ahead, but we have no plans to reduce our workforce numbers now or anytime in the future. In addition, our company is confident that we will continue to achieve sustained business growth in the years to come."
