Following the most recent round of employee discontent this week, Foxconn’s flagship iPhone production in China is expected to witness a significant decrease in November shipments, according to a person with firsthand knowledge of the situation on Friday. This comes as thousands of workers leave the plant.
The severe COVID-19 regulations have caused production to be hampered in advance of Christmas and the Lunar New Year vacation in January. Many employees have either been placed in isolation or have left the plant, which has led to worker unrest. Foxconn might potentially see more than 30% of the facility’s November production disrupted with Wednesday’s escalation, up from an internal estimate of up to 30% when the labour concerns first surfaced in late October, the source added.
According to the insider, it is unlikely that complete production would restart by the end of this month as the plant is the only one that produces luxury iPhone models, including the iPhone 14 Pro.
“The worker unrest at Foxconn’s plant in China could weigh on Apple’s November iPhone shipments,” Victoria Scholar, head of investment at Interactive Investor said, as concerns grow over Apple’s ability to deliver products for the busy holiday period.
High-end iPhones are anticipated to be in short supply at stores this holiday season, according to U.S. Best Buy Co Inc. Reuters last week stated that analysts said that sales of iPhones at Apple outlets in the United States during the Black Friday shopping season were also down from a year ago and that it was taking longer to restock stockpiles.
According to KGI Securities analyst Christine Wang, if the current problem persists through December, approximately 10 million iPhone production units will be lost, resulting in a 12% decrease in iPhone shipments in the last quarter of 2022. In preparation for the holiday shopping season, Wedbush Securities forecasts that many Apple outlets currently have 25% to 30% fewer iPhone 14 Pros than usual.
Apple said it expected less shipments of the iPhone 14 Pro and iPhone 14 Pro Max than it had previously predicted in a statement on Nov. 7. Foxconn recently hired new employees, and some of them grumbled that they had been mislead about the factory’s pay and benefits while others griped about living in dorms with coworkers who had tested positive for COVID.
On Thursday, Foxconn apologised for a “technical glitch” in the hiring process that had to do with wages and later made protesting new hires who agreed to resign and depart an offer of 10,000 yuan ($1,400).
More than 20,000 employees, many of them were recent hires who weren’t yet working on production lines, allegedly grabbed the money and went. Videos shared on Chinese social media on Friday showed throngs and extended lines of workers waiting for buses while carrying a lot of stuff.
Although they did not specify how many new hires had departed the site, another Foxconn source with knowledge of the situation claimed that some had. According to this person, the production would not be further harmed by the people departing because they had not yet received training or started working.
