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Apple iPhone Supplier Foxconn Planning Deep Cost Cuts (bloomberg.com)
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.
the company plans to eliminate about 10 percent of non-technical staff.
This sounds exactly like what I would say almost every large company that I've ever worked for needed to do very badly.
Not only do you get rid of the salary and benefit costs from these people, you also can reduce a lot of pointless process overhead and focus on what is more important, delivery of the end result.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
iPhone demand is falling. Considering that iPhone sales are estimated to fall 20% to 30% ...
Just to be clear: iPhone UNIT sales are falling, but Apple is still making record profits because the cost-per-phone is going up. But this doesn't help Foxconn because their revenue for assembly is not going up (the newer phones are easier to assemble) while their costs, especially labor, are climbing.
An assembly line worker in Shenzhen makes about $3 per hour, vs less than $1 per hour for making the first iPhone in 2007.
Could this be a sign of Apple moving production to the US I wonder? It'd make sense for them
It actually makes little sense. Most of the components are made in China, and many right in Shenzhen. If you run out of 0.2mm screws in Wisconsin, you shut down the assembly line. If run out in Shenzhen you send a guy on a bicycle over to the screw factory and he is back in 20 minutes.
Also, US tariffs on components are often higher than on finished products, and the paperwork and delay will be way worse on 100 components than on one phone.
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