Foxconn has cut 50,000 of its contract jobs since October of 2018, which is months earlier than usual. The company typically renews these contracts until the end of Januaryto meet the demand during the holiday season, however, given the slowing sales of smartphones, particularly from Foxconn's biggest customer, Apple, the cuts were made earlier than the usual year-end.
Foxconn seems to be on a cost-cutting program, aiming to save $2.96 billion in 2019 over 2018, and recently merged its division which assembles MacBooks with the division assembling Dell and Acer laptops.
Earlier in the month, Apple reportedly cut iPhone production by 10%, and amidst the slowing demand, also halted trading of its shares to revise-down its earnings for the current quarter. Apple's second largest assembler of iPhones, Pegatron, has also been canceling labor contracts. It seems that many companies reliant on Apple as a customer are feeling the financial consequences of slowing demand, and whilst Foxconn doesn't rely exclusively on Apple, a reduction in orders from Apple would almost definitely hurt Foxconn's bottom line.
One company which has not felt as big of an impact on its financials is Qualcomm, which reportedly refused to supply modems for Apples latest products and both companies are tied up in many cases worldwide, with Qualcomm having banned sales of certain iPhone models in both Germany and China.
It seems Tim Cook is trying to steer Apple into the healthcare market and boost its business and profits by branching out beyond smart devices and PCs. However, the tech titan has a long way to go to get back to its peak.
Source: Nikkei
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