Foxconn employees at the Taiwanese plant in Zhengzhou, China, left the company over a pay dispute with the company. The Zhengzhou plant is estimated to account for more than 70% of Apple’s global iPhone assembly.
Jakub Porzycki | Nurphoto | Getty Images
Foxconn, the world’s largest contract electronics maker, reported a sharp drop in November revenue on Monday after the company battled a Covid outbreak and labor unrest at the world’s largest iPhone factory. in China.
The Taiwanese company, also known as Hon Hai Precision Industry Cosaid last month’s revenue totaled 551.1 billion New Taiwan dollars (about $18.05 billion), down more than 29% from October and more than 11% from November 2021 .
Foxconn said the decline was due to “production gradually entering off-peak seasonality and some of the outbreak-affected shipments in Zhengzhou.” The company did not provide further details.
Zhengzhou, a city in China, is home to the world’s largest iPhone assembly plant, run by Foxconn.
In late October, the Zhengzhou factory was hit by a Covid outbreak and Foxconn fought to bring it under control with measures such as testing and isolating infected workers, and effectively locking down the factory.
Many workers fled the factory soon after the outbreak began.
Last month, employees clashed with security personnel at the Zhengzhou plant and some workers took to social media to air their grievances over what appeared to be a delay in bonus payments. Foxconn later apologized for a “technical error” that caused the workers’ pay issues.
In a bid to entice workers back to the factory, Foxconn announced a series of bonuses last month.
Foxconn did not address rare worker unrest in its November earnings update, but said the Covid outbreak was under control.
“At present, the overall epidemic situation has been brought under control, with November being the most epidemic period,” the company said.
“In addition to reallocating production capacity from different factories, we have also started recruiting new employees and are gradually moving towards restoring production capacity to normal. The outlook for the fourth quarter is expected to be approximately consistent with market consensus,” he added.
Investors will now monitor any impact on Applegiven its reliance on the Zhengzhou factory for global iPhone production.
Evercore ISI analysts said Foxconn’s issues could affect production of between 5 million and 8 iPhone units in the December quarter, mostly at the high end of Apple’s smartphone lineup.
This could negatively impact Apple’s revenue by $5 billion to $8 billion, the consultancy added.
Correction: This story has been updated to correct a conversion from New Taiwan dollars to US dollars.