Foxconn Technology Group, a global contract electronics manufacturer and major supplier to Apple, has announced plans to reduce its massive workforce due to decreasing revenue growth and increasing labor costs in China.
The company did not provide specific details on the timeline or target for the workforce reduction. Labor costs have more than doubled since 2010, following a series of worker suicides at the company. Foxconn’s revenue growth plummeted to 1.3 percent in 2013 and partially rebounded to 6.5 percent last year, remaining far below the double-digit growth seen from 2003 to 2012.
To mitigate rising labor costs, Foxconn plans to increase automation by using robotic arms for tasks currently performed by human workers. Last year, Foxconn announced its plans to invest an extra $1.67 billion in Karnataka, aiming to start making iPhones in Karnataka by April 2024, creating approximately 50,000 jobs.
The extra investment aimed at establishing a manufacturing facility in Devanahalli, where Foxconn had acquired 300 acres of land for this purpose. Foxconn, under its flagship unit, Hon Hai Precision, employs about 1.3 million people during peak production periods, making it one of the largest private employers globally.
