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Home Business Foxconn Cuts Down Workforce, Some Take 4 Months of Unpaid Vacation

Foxconn Cuts Down Workforce, Some Take 4 Months of Unpaid Vacation

  • Foxconn encourages vacations through two stages. In the first stage, the entry bonus is paid based on the number of days on the job. In the second stage, even if you no longer work, the entry bonus will be paid as usual, “just want employees to go.”
  • Some class heads do ideological work for workers, mobilize meetings, and encourage workers to start their own businesses. “You go out and start a business. If you develop well, you don’t have to come back; if you don’t develop well, you can still have this job.”
  • Going to the mask factory seems to be a mainstream choice. The epidemic situation in foreign countries continues to spread, which expands the market for domestic mask manufacturers, but this option does not have so many positions.
  • Foxconn workers are like migratory birds. With the rhythm of Apple’s iPhone new product release, it increases and decreases orderly. In September, many people will return.
Picture / Visual China
Picture / Visual China

After the May Day holiday, Foxconn worker Lin Cong ran to the mask production line of a small factory. On April 30, he also did a complete signal test on the Apple iPhone 11 production line. Earlier on March 2nd, he took office after simple training under Foxconn’s highest entry bonus policy. When leaving Foxconn, less than two months.

Foxconn cannot live without workers. The novel coronavirus epidemic made it difficult for workers to return to work and start work. To this end, Foxconn offered the most expensive entry bonus in history and mobilized internal supervisors to join the “Recruit Workers” war. “We recruit 2,000 people every day and 30,000 people in a few weeks.” A supervisor of Shenzhen Longhua Park once described to the reporter.

In the past few days, the rumors of Foxconn’s Shenzhen factory requiring employees to take a vacation for four months (May-September) are widespread. The reporter asked Foxconn to verify that the response was: “At present, the Group’s factories are operating normally, and there is no such thing as large-scale layoffs and vacations.”

Apple’s Forbidden City

This may not be the case. A person in charge of Foxconn’s Apple business line revealed to the Caijing reporter that about 4,000 employees on the iPhone assembly section are on leave with a base salary. The aforementioned supervisor even boldly estimated that “the leave policy involves about 20,000 formal workers.”

Apple's Forbidden City, Foxconn
Apple’s Forbidden City, Foxconn

Many people close to Foxconn revealed to the reporter that the vacation workers mainly involved Foxconn’s two iPhone business groups: Yuzhan, under Hongfujin IDPBG business group and IMEBG business group. Lin Cong is one of the people who left the Guanlan IDPBG assembly line on April 25 within the new employee policy.

Affected by the epidemic, Foxconn parent company Hon Hai Technology Group (hereinafter referred to as “Hon Hai Group”) performed poorly. Revenue in February was NT $ 217.5 billion, down 18.1% year-on-year; revenue in March was NT $ 347.7 billion, down 7.7% year-on-year. Throughout January-March, revenue was NT $ 929.7 billion, a year-on-year decrease of 12.0%.

This situation is mainly due to factors such as the decrease in Apple iPhone orders. On the last day of April (US time), Apple released its second-quarter financial report with a net profit of 11.249 billion US dollars, a year-on-year decrease of 3%. According to the latest research from Strategy Analytics, a third-party analysis agency, iPhone shipments fell 9% year-on-year in the first quarter. The small number of fluctuations are related to the removal and retention of some industry chain workers.

At present, there are more than 200,000 employees in several major parks in Shenzhen, and tens of thousands of IDPBG business units and Yuzhan are related to the iPhone. If Apple ’s iPhone consumer continues to slump, more workers may face vacation or income problems.

“Those are not my concerns, I only care about how to support myself.” Lin Cong said.

From 10710 yuan to 2400 yuan

There are more than 300 workers left on the production line under Li Ming’s jurisdiction. He is a section leader of Guanlan Park in Shenzhen. The Guanlan IDPBG Division is mainly involved in the assembly of iPhone mobile phones to the shipment of finished products and the production of mobile phone motherboards.

When Foxconn was in urgent need of workers two months ago, he was still recruiting workers into the factory as a personal intermediary, and a quota of 3,600 yuan was awarded. At that time, in order to encourage employees to return to work as soon as possible, recruit as many new employees as possible, launched the most expensive entry bonus in history. However, in order to prevent excessive employee mobility, the monthly bonus and the next month’s salary are paid together, and the employee must be on duty when the bonus is issued.

Apple's Forbidden City, Foxconn
Apple’s Forbidden City, Foxconn

Up to now, Li Ming still remembers quite clearly: before March 31st, he would be paid 4,250 yuan for 60 days of employment, and 2,500 yuan for 90 days, for a total of 6,750 yuan. For newly recruited employees, another 360 yuan bonus will be distributed in three months. In other words, for a new employee, the bonus cost is 10710 yuan.

After more than a month, Foxconn’s workforce became more than saturated. Li Ming told the reporter that “orders are reduced, and components can’t come in.” He said that in mid-March, the vacation began to spread in the factory area as soon as the vacation was said. In February, Foxconn was forced by the existing order delivery pressure to require workers to start the production line as soon as possible. However, in March, the situation turned sharply. The weakness of the consumer side under the impact of the global epidemic has already swept back to Foxconn’s production line.

An internal announcement showed by Zhang Yang, who manages the automated production line at the Longhua Park in Shenzhen, showed that leaving the company must follow the voluntary principle of employees and prohibit any forced employee behavior. The policy of the first phase is that from April 17 to April 21, employees who handle resignation will be accounted for on a daily basis and will receive bonuses with the resignation salary.

Encouraging workers to take vacations has gone through two stages. The first stage is that the above-mentioned entry bonus is paid according to the number of working days, and the second stage is that even if the follow-up does not go to work, the entry bonus is also distributed as usual, Zhang Yang explained that the purpose of such a policy is to let employees go. Foxconn made the leave policy voluntary, and the supervisor announced it and encouraged employees to take leave.

In this way, the worker basically has two choices: First, continue to work for 5 days and 8 hours without overtime to get the basic salary, and get the bonus as usual; Second, to stay without pay to get the bonus and find other things to do. If they are not willing to accept it, workers can leave their jobs directly.

Lin Cong belongs to that group of people who can’t bear it. Throughout April, Lin Cong received a base salary of only 2400 yuan, no overtime for 5 hours and 8 hours, deducting the social security provident fund, and finally got more than 1800 yuan. “Basic moonlight in Shenzhen”.

Manager’s Dismissal Task

But some workers are still reluctant to leave. “I couldn’t find a job outside at all.” Sun Qian didn’t plan to leave when she saw that her colleagues who went out earlier didn’t find a job. “Going out not only can’t find work, but also needs more money for clothing, food, housing, and transportation.” When there are more people who do not want to leave, they are converted into managers’ task of persuasion.

Li Ming received the dismissal indicator. “No specific figures, 3% -5%, but there is no cap.” Every week, Li Ming has a headache. If the persuasion quota is counted down among the various class leaders, he will be talked. He saw that some class heads did ideological work for workers, mobilized meetings, and encouraged workers to start their own businesses.

“Now that the welfare policy is good, you can stay without pay. If you go out and start a business, you don’t have to come back if you develop well; there is still a way to go if you don’t develop well.” Li Ming told the reporter from Caijing about the workers. Li Ming can’t do the job to dismiss employees, and every time he was perfunctory and talked.

Apple's Forbidden City, Foxconn
Apple’s Forbidden City, Foxconn

He recruited many employees early on. At that time, he could get some rewards for recruiting workers, and he could get half the amount of awards (1800 yuan) for the employees who were recruited through the factory. The latter constantly recommended new employees, one takes ten, ten takes twenty. Now, he had to watch some of them leave again. “I also came from the countryside, and I understand them. I understand the pain when I have no work, no meals.”

Since starting part-time personal recruitment agency work in 2016, Li Ming has upgraded from “recommending a worker 200 yuan” and “recommending a worker to get a mobile phone” to account for more than 800,000 yuan last year. For this epidemic, he has already earned more than 500,000 yuan. For a middle-level manager in a production line, this number is very alarming.

After the vacation policy came down, the most, 60% -70% left among 500 people. This includes those who voluntarily quit, voluntarily leave without pay and those who are dismissed.

Previously, Foxconn also recruited dispatched workers through dispatch companies and individual recruitment agencies. Li Ming said that because there is no formal labor contract, “these dispatched workers were directly dismissed.” Li Yang also said that dispatched workers have ended the construction period early.

However, another person from the Foxconn Group told the reporter that dispatch workers and companies have signed contracts, and dispatch companies and Foxconn also have contractual agreements, or even tripartite agreements.

Fight or return home?

After the May Day holiday, Lin Cong ’s WeChat positioning has been transferred from Guanlan Foxconn to a small factory in Shenzhen Chuangxuan Industrial Park, which has converted to masks for temporary work. He said that intermediary companies are relatively bad, and there are always some deductions. He doesn’t want to deal with intermediaries anymore, the mask factory job was found by himself.

Going to the mask factory seems to be a mainstream choice. The epidemic situation in foreign countries continues to spread, which expands the market for domestic mask manufacturers. Large and small mask factories are seeking overseas orders. The increase in production will follow. At this time, despite the intermediary fee, large and small labor dispatch companies did play a role in grafting. BYD, also in Shenzhen, also began producing masks.

The BYD Hunan factory started to recruit people in large quantities. In 2019, BYD acquired Flextronics. Now, the factory here is producing masks. “As long as you want to find a job, the labor dispatch company directly sends you from Shenzhen to Changsha for free.” Li Ming has met some employees and really went to Changsha, but some went home.

A worker complained to him, “What can I do when I go back? Go back and lie down every day, I can get more than 1,000 yuan at Foxconn.” Li Ming persuaded him, “Send a takeaway, earn thousands.” But the other party doesn’t think so, “less is better than nothing.” At present, this job has become a tasteless chicken rib.

The epidemic has changed many things. Li Ming ’s hometown was in a prefecture-level city in Sichuan. When Foxconn landed in Chengdu, he considered returning to work in the province. However, only in places like Shenzhen can he earn high recommended bonuses and earn hundreds of thousands a year. “Shenzhen is more profitable than Chengdu.” The sudden outbreak urged him to rethink his future.

The haze of the epidemic

In February, which was most affected by the epidemic, Hon Hai Group’s revenue was NT $ 217.46 billion, a decrease of 40.35% month-on-month, and 18.13% year-on-year, the largest monthly decline since March 2013. In March, Hon Hai Group’s revenue was NT $ 347.7 billion (approximately US $ 11.51 billion), a year-on-year decline of 7.7%. The revenue growth rate turned positive in April.

Hon Hai Group Chairman Liu Yangwei said at the performance briefing in April that the first quarter was affected by the epidemic. Intelligent, corporate and computing products fell by 15% year-on-year, but in the case of delayed orders, the performance of the second quarter will rebound significantly In the first half of the year, it can still be flat last year.

Li Ming doesn’t think so. A former colleague who had already switched to BYD asked him if he wanted to go to BYD. “I’m going to go,” he told the reporter. From the current situation, he thinks BYD is more developed and more promising. The salary will not be much higher, “If BYD develops well, the recommendation reward will be high, I will definitely go.”

Similar to Li Ming, Zhang Yang is a personal recruitment agency working for Foxconn. Over the past two months, he has earned 300,000 by recommending workers to enter the factory. He recommends employees to enter the factory, and the absence of vacation does not affect the access to referral bonuses. He estimates that there will be 700,000 gains this year, and he is already looking forward to the iPhone’s fall conference.

For ordinary workers who cannot get the recommended bonus, both the mask factory and going home are not good ways. A CEO of a new materials company in Shenzhen, which converted masks, told the reporter that mask factories are not as many locations as Foxconn employees think. Many small and medium-sized mask companies are either difficult to find the core raw material of the mask and melt-blown cloth, or they are excluded from export whitelist by the government, they can’t have foreign exchange and survive difficultly. Going forward, “Neither will find regular workers nor will they hire temporary workers.”

The haze of the epidemic has not disappeared. In addition to Foxconn and BYD, which are temporarily converted to production, many small and medium-sized mask companies are still struggling to survive. Foxconn workers are like migratory birds. With the rhythm of Apple’s iPhone new product release, it has increased and decreased in an orderly manner. “In September, many people will come back.” Zhang Yang said.

For most workers, going home is inevitable. However, some people have returned home now, and some will continue to roam in Shenzhen. “Making money for a few more years, I also went home,” Li Ming said, “too tired.” Li Ming felt a bit sad when he saw the recommended staff calling him a liar in WeChat.

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Nancy Huang
I'm a journalist in Shenzhen, China. I have been working in several news agencies in China since 2008.

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