Update: While it’s hard to read too much into these reports, Foxconn told The Wall Street Journal the freeze on hiring is a result of “a high employee return rate following the Lunar New Year holiday.”
According to the report from Financial Times, Apple’s major assembly partner Foxconn has halted new hiring at its facilities due to a slow down in production for the iPhone 5:
The suspension in hiring by China’s largest private sector employer and the biggest assembler of Apple products, is the first such countrywide move since the 2009 downturn, prompted by the financial crisis. It underscores the weakening demand for some Apple products, which has put pressure on the US company’s battered share price.
Foxconn confirmed it is not currently hiring in its plants located in mainland China, and FT reported the company’s employees were informed that hiring would stop until at least the end of March “in response to reduced orders for the iPhone 5.” While the iPhone 5 doesn’t seem to be experiencing a slow down, according to the latest numbers from Strategy Analytics, the March time frame would line up nicely with rumors of iPhone 5S production beginning in March. Many analysts are calling for a June or July launch of the next-generation iPhone, and Apple could begin initial production as early as next month if true. The decreased production at Foxconn is likely thanks to the expected falloff in new sales in the months following the busy holiday season. Less likely is speculation that Apple could be switching manufacturers.
Recruiters in China told FT that Foxconn has stopped hiring specifically for the iPhone and iPad production lines in many of its factories:
“Recruiters said hiring has stopped for the iPhone and iPad production lines in Shenzhen, the company’s largest plant with more than 200,000 workers, as well as at Zhengzhou, the second-largest with about 200,000 workers, which also makes iPhones. Taiyuan, which had 79,000 workers as of September and makes iPhone parts, and Chengdu, which makes the iPad, were also putting a freeze on hiring.”