Foxconn launches mass hiring drive in China as output in India sinks
Published: May 12, 2021 07:43 PM
Workers are seen at a workshop in Longhua science and technology park of Foxconn Technology Group in Shenzhen, south China's Guangdong Province, Feb 22, 2019. (Xinhua/Mao Siqian)

Workers are seen at a workshop in Longhua science and technology park of Foxconn Technology Group in Shenzhen, south China's Guangdong Province, Feb 22, 2019. (Xinhua/Mao Siqian)

Foxconn is expanding its recruitment at several plants in China and offering higher bonuses for candidates and middlemen, which experts say could be groundwork for moving some production to China from India, where output has been severely affected by the seemingly uncontrollable COVID-19 outbreak in the South Asian country.

Factories in Taiyuan, North China's Shanxi Province and Zhengzhou, Central China's Henan Province are offering a one-time bonus from 5,000 ($777) up to 7,000 yuan for those who work up to at least 90 days, two sources with the human resources division of Foxconn told the Global Times on Wednesday. For those who work longer will get more bonus in return.

"Several sections are looking for more workers to make products including iPhones, and we're recruiting as many people as possible these days," said one of the sources. Another recruitment manager said that the factory in Shenzhen alone needs another 20,000 workers.

Both sources spoke to the Global Times on the condition of anonymity.

Foxconn recruits year-round because of high turnover, but this recent move is still unusual given the timing. The Apple contract factory in India has been disrupted, with output of products like the iPhone 12 slumping more than 50 percent after workers infected with COVID-19 had to leave their posts, Reuters reported.

It remains unclear whether there is a direct connection between the mass recruitment in China and the disruptions in India, but several industry insiders told the Global Times on Wednesday that it's highly likely Foxconn will seek to diversify some of its operations amid the epidemic.

"If the Foxconn plant in India does not resume production for a long period of time and there is demand for phones to be sold in India, it is possible for them to shift production to China," Ma Jihua, an industry insider, told the Global Times on Wednesday.

Such a shift would be a set-back for companies that are reportedly shifting production out of the Chinese mainland, a plan that evidently face profound risks and challenges. It would also deal a major blow to India's ambitious plan to bolster its manufacturing capability as it faces a raging epidemic.  

Earlier this month, market research firm Counterpoint suggested that Apple had been slowly and smoothly shifting production out of the Chinese mainland, its second-largest market, but the epidemic disrupted that attempt and Apple's 2020 production in the Chinese mainland returned to 2017 levels.

Yang Shucheng, secretary-general of the India China-Mobile-Phone Enterprise Association, said that the possibility of a supply chain transformation could not be ruled out, should the epidemic remain out of control.

Chinese mobile brands such as OPPO and VIVO have already transferred some of their orders from India to factories in China after the epidemic in India posed increasing problems like local labor shortages and logistics halts at some ports, Yang told the Global Times on Wednesday, noting that Apple could also increase its domestic orders.

However, Yang noted that the transformation can't take place on short notice, because the materials of Foxconn's Indian factories are all in India, and Apple's phone sales are declining, so it may take at least three months - if it actually happens.

It is hard to predict when the epidemic in India can be reined in, which means uncertainty for the labor-intensive industry in which companies like Foxconn are deeply involved, Liang Zhenpeng, another industry analyst, told the Global Times on Wednesday.

"To many contract factories, it is possible to look at other alternatives and China, where the epidemic is well controlled and the supply chain is adequate, can guarantee smooth production," said Liang.

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