Declining demand prompts iPhone foundries to reduce overtime and lay off workers

On April 22, according to foreign media reports, due to the spread of the new coronavirus epidemic worldwide, Apple has closed all retail stores outside Greater China since March 14. The direct impact is that consumer demand for Apple products has been declining. This has a huge impact on Apple suppliers, causing them to slow down production, reduce the number of employees and overtime. There are reports that several staff members of the Foxconn Zhengzhou plant responsible for iPhone assembly said that the company will not currently recruit employees. In addition, they laid off a large number of temporary workers employed by the company, who had helped speed up the production of the factory after it closed in February. More information shows that Foxconn has also reduced overtime hours and even encouraged workers to take vacations. According to the workers, there has been no overtime since early this month (April 10). Foxconn is not the only company currently experiencing this situation. Pegatron has also laid off staff after Apple's order demand has decreased. It is estimated that about 1,000 temporary workers and third-party employees were fired. According to an employee working in the Pegatron factory, there are no orders from the United States, which means there is no need to retain additional workers. The shrinking workforce reflects the declining global demand for smartphones. However, Apple has begun to reopen its retail stores, South Korean retail stores will resume operations first. There is no official news about when the Apple retail store in the United States will open, but the date of speculation points to May. The reopening will be staggered after Apple has considered all local conditions and guidelines in different places. However, consumers can still buy iPhones and other Apple products online, but the economic uncertainty caused by the new crown virus seems to cause many consumers to postpone the replacement of smartphones. Last week, an analyst at Goldman Sachs predicted that iPhone sales would drop by 36% this quarter. In February of this year, Apple warned investors that the epidemic of China ’s new crown virus had hampered the supply of iPhones. However, as China gradually controls the epidemic, the company hopes to increase production. Of course, in the past two months, the epidemic began to spread rapidly around the world, creating a completely different economic situation. Now Apple's main problem is demand, not supply. The company may provide more information about its financial position when it announces its second-quarter earnings later this month. In January, Apple had more than $ 200 billion in cash on hand, enough to withstand any problems caused by the New Corona virus crisis. A