Foxconn struggles to take bigger toll on giant iPhone factory in China as more workers leave – source

  • Foxconn Zhengzhou factory’s November shipments fall further – source
  • Workers’ unhappiness at the factory escalated into protests this week
  • Over 20,000 workers, mostly new recruits, have left – source

TAIPEI, Nov 25 (Reuters) – Foxconn’s ( 2317.TW ) flagship iPhone factory in China is set to see its November shipments further reduced due to the latest bout of labor unrest this week, a source with direct knowledge said on the case on Friday. as thousands of employees left the site.

The company could now see more than 30% of the site’s production in November affected, up from an internal estimate of up to 30% when the factory’s labor problems started in late October, the source said.

The site, which is the only factory where Foxconn makes premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month, the source added.

The world’s largest Apple ( AAPL.O ) iPhone factory has struggled with strict COVID-19 restrictions that have fueled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday, as many workers were either isolated or fled the plant.

That has raised concerns about Apple’s ability to deliver products for the busy holiday season, as the Zhengzhou factory accounts for 70% of global iPhone shipments and produces the US firm’s popular iPhone 14 models.

On Wednesday, workers, most of whom were new recruits hired in recent weeks, clashed with security personnel.

Many claimed they had been misled about compensation benefits at the factory, and others complained of sharing dormitories with co-workers who had tested positive for COVID.

Foxconn apologized for a pay-related “technical error” in hiring on Thursday and later offered 10,000 yuan ($1,400) to protesting new recruits who agreed to resign and leave.

The source said more than 20,000 workers, mostly new hires not yet working on production lines, took the money and left. Videos posted on Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses.

“It’s time to go home,” one person wrote.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said Thursday it had staff at the factory, did not immediately respond to a request for comment Friday.

The plant, before its problems began, employed more than 200,000 workers. It has dormitories, restaurants, basketball courts and a soccer field across its sprawling facility of about 1.4 million square meters (15 million square feet).

Another Foxconn source familiar with the matter said some new hires had left the campus, but did not elaborate on how many. This person said that because the people who left had not yet been trained or started working, their departures would not cause further damage to current production.

“The incident has a big impact on our public image, but little on our (current) capacity. Our current capacity is not affected,” the source said.

“There’s only so much companies can do on pandemic prevention … It’s been an issue for a while. This is an issue that everyone faces,” the person said, pointing to other worker unrest sparked by rigid COVID restrictions , including upheaval at another Apple supplier, Quanta ( 2382.TW ), in May.

Foxconn shares closed up 0.5%, lagging the broader market (.TWII), which ended flat.

($1 = 7.1616 Chinese Yuan Renminbi)

Reporting by Yimou Lee; Additional reporting by Brenda Goh; Editing by Anne Marie Roantree, William Mallard and Gerry Doyle

Our standards: Thomson Reuters Trust Principles.

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