The largest iPhone manufacturing plant owned by China’s largest iPhone maker Foxconn is located in Zhengzhou, and has been the scene of riots all week. The latent unhappiness of the workers has turned into protests in recent days and there have been numerous clashes with security personnel.
Finally, Foxconn yesterday apologized for a pay-related “technical error” that occurred after hiring the latest batch of recruits, who it said were duped about compensation benefits. The firm offered each new protesting recruit CNY 10,000 (about $1,400) to resign and vacate the premises.
And it turns out the bid may have been a little too successful, as reports are pouring in that over 20,000 workers have taken on Foxconn. They were mostly new hires who weren’t working the production lines yet, they just took the money and left. Before the problems started, more than 200,000 employees worked at the factory.
All of this has the potential to have a rather negative impact on iPhone production and therefore shipments. On Nov. 7, Apple already said it expected lower shipments of the iPhone 14 Pro and Pro Max than previously expected, and Best Buy on Tuesday warned that high-end iPhones are in short supply in stores this holiday season.
Some analysts estimate that if the “current problem” lasts through December, about 10 million fewer iPhones will be made than originally planned. Others predict that there will be 25% to 30% fewer iPhone 14 Pros than “normal” ahead of the holiday shopping season.
On the other hand, a source inside Foxconn said Reuters that “the incident has a large impact on our public image but little on our capacity. Our current capacity is not affected”, as the people leaving had not yet been trained or started work.
The worker unrest was triggered in part by severe COVID restrictions which forced the plant to operate in a “closed-loop” mode and place new recruits in dormitories shared with COVID-positive people.
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