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Apple iPhone Supplier Foxconn Planning Deep Cost Cuts (bloomberg.com)

Posted by BeauHD on from the cut-costs dept.

Foxconn, Apple's biggest assembler of iPhones, is planning to cut $2.9 billion from expenses in 2019 as it faces "a very difficult and competitive year." According to Bloomberg, citing an internal company memo, "The iPhone business will need to reduce expenses by [about $900 million] next year and the company plans to eliminate about 10 percent of non-technical staff." For reference, Foxconn's spending in the past 12 months is about $6.7 billion. From the report: Foxconn assembles everything from iPhones and laptop computers to Sony PlayStations at factories in China and around the world. Foxconn has been hit by a slowing smartphone market, while trade tensions with the U.S. add to global uncertainty. The company will conduct an in-depth review of managers with an annual compensation of more than $150,000, according to the memo. Other cuts include a planned [$433 million] reduction in expenses at Foxconn Industrial Internet Co., its Shanghai-listed offshoot. "The review being carried out by our team this year is no different than similar exercises carried out in past years to ensure that we enter into each new year with teams and budgets that are aligned with the current and anticipated needs of our customers, our global operations and the market and economic challenges of the next year or two," Foxconn said in a statement to Bloomberg.

5 of 85 comments (clear)

  1. half of a statement by sheramil · · Score: 3, Insightful

    "The iPhone business will need to reduce expenses by [about $900 million] next year ..."

    ... in order to achieve what? The level of profit desired by the investors? Will something bad happen if they don't get their fix?

    1. Re:half of a statement by LynnwoodRooster · · Score: 3, Insightful

      To continue making a profit, since iPhone demand is falling. Considering that iPhone sales are estimated to fall 20% to 30%, it's time to slash quite a bit of that work force - or lose a lot of money.

      --
      Browsing at +1 - no ACs, I ignore their posts. So refreshing!
  2. Could this be a sign of Apple moving production? by melted · · Score: 3, Insightful

    Could this be a sign of Apple moving production to the US I wonder? It'd make sense for them: the production is mostly automated anyway, and manual labor is a minuscule fraction of the overall cost. In fact, humans wouldn't be able to work on much of this stuff even if they wanted to: there are thousands of parts inside the phone, and they are 0.2mm across, hard to see with the naked eye. If it's just screwing the boards into pre-milled chassis, attaching the flexes, and slapping the screen on top, I don't see why it can't be done right here in the US, in e.g. Texas or another business-friendly state.

  3. robot worklines are comeing and china is going to by Joe_Dragon · · Score: 3, Insightful

    robot work lines are coming and china is going to have to deal with it.

  4. Foxconn the iPhone Supplier by quenda · · Score: 4, Insightful

    We make Blackberries - do they call us the Blackberry maker? No.
    We make Nokia phones - do they call us the Nokia supplier? No.
    We make Nintendos, Xboxes and Playstations, but do they call us the console supplier? No.
    But you build one fucking iPhone ...