Foxconn is paying substantial incentives to workers to bring them back to its facility in Zhengzhou, China.
This comes after a general strike caused by a salary disagreement led to staff walking out of their jobs, threatening to leave Apple with an inadequate supply of iPhones for the critical Christmas season, as per CNBC’s report.
Course of Events
This month, workers at the Zhengzhou facility, the biggest iPhone production in the world owned by Apple’s assembly partner Foxconn, battled with security officers.
Tech Times previously reported that a social media outcry from workers over a reported delay in incentive payments sparked the unusual outbreak of worker dissatisfaction.
Foxconn, a company based in Taiwan, first blamed a technical glitch for a pay disparity between actual and promised wages.
Foxconn was also shaken by a Covid-19 breakout last month, which caused employees to abandon the site while the corporation took measures to contain the virus by isolating infected workers.
In an unusual move, the provincial administration of China’s Henan province even activated its community governance system. Local cadres were allegedly pressuring Foxconn employees to return to the iPhone manufacturing line.
It is now scrambling to make up for a shortage of employees that endangers the worldwide supply of iPhones as workers walk off the job.
Read More: Apple iPhone Factory Workers Clash With Chinese Police After Foxconn COVID Situation
Foxconn said Tuesday, Nov. 29, that it would reward its employees with a 500 Chinese Yuan ($70) payout upon their return, a 3,000 yuan ($50) incentive for staying with the company for more than 30 days, and a 6,000 yuan ($80) bonus in January.
According to CNBC, this news follows an announcement the day before that some employees in December and January would receive wages of up to 13,000 yuan ($1,815).
Tech Times just reported that Apple’s stock plummeted after a Covid outbreak slowed iPhone manufacturing in China.
Monday was Apple’s worst one-day plunge in more than two weeks, dropping 2.6% to $144.22 in New York. Overall, Apple is down 19% this year. Apple’s current series is built in the Zhengzhou Foxconn factory, causing the dip in shares.
Apple’s sales dropped after introducing the iPhone 14 and Pro Max in September, threatening Christmas sales. Apple lowered its production goal from 90 million to 87 million smartphones.
Evercore ISI analysts believe that more than 70% of Apple’s worldwide iPhone manufacture occurs at the Zhengzhou facility, demonstrating the Cupertino giant’s dependence on China as a manufacturing center. This is despite the rising geopolitical tensions between the US and China, as well as Beijing’s rigorous “zero-Covid” policy, which disrupts supply chains.
In a report released Monday, Evercore ISI predicted that Apple would see a further decline in sales due to the demonstrations and walkout in Zhengzhou.
It stated that Apple’s December quarter sales might be impacted by $5 billion to $8 billion if demand for iPhones, especially at the top end of Apple’s smartphone range, drops by 5 million to 8 million units.
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Written by Tech Times writer Trisha Kae Andrada
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