Why iPhone workers in China will take a break over the Lunar New Year

Foxconn, the Chinese company that makes most of the company's iPhones, is letting workers go on a holiday break for the Lunar New Year, which begins in February, amid reports of Apple reducing production orders for its new iPhone models.

Bobby Yip/Reuters
Workers are seen inside a Foxconn factory in the township of Longhua in the Guangdong province in Southern China in May 2010.

As Apple transitions into selling newer iPhone models after introducing its iPhone 6S and 6S Plus in September, the company’s decision to scale back orders for the phones this winter is having repercussions at the company’s suppliers across the globe.

Foxconn, the Chinese company that makes most of the company’s iPhones, will cut workers’ hours over the week-long Lunar New Year holiday and not offer overtime, a person familiar with the company’s plans told Reuters on Wednesday. That move led a provincial government to offer Foxconn more than $12 million to avoid layoffs late last month.

Typically, the Taiwan-based company, formally known as Hon Hai Precision Industry Co., offers the hundreds of thousands of people who work at its factories assembling iPhones and iPads incentives to work over the holiday, such as triple overtime pay.

But this year appears to be different, judging by Apple’s own predictions about the sales of its new phones, which are incremental updates of previous devices rather than a full-scale redesign.

In October, Apple head Tim Cook said that the company expected iPhone sales to increase in the first quarter of this fiscal year, which ended in December, compared to the same period a year earlier. He declined to give further projections about the new year leading some analysts to speculate that demand for the phones might be slipping.

Despite fears of declining phone sales, Apple had a busy holiday season, accounting for 49.1 percent of all new devices activated during the week leading up to Christmas, data from mobile analytics firm Flurry shows.

While that trend has consequences for investors, it may have a larger impact on workers at suppliers such as Foxconn, which has battled questions about poor working conditions and treatment of workers at factories across China, including a rash of suicides.

Last month, some workers at the company were let go on an early holiday break, even though the new-year holiday season — China’s biggest — doesn’t begin until February, the The Wall Street Journal reports

Foxconn denied the early holiday reports, according to StreetInsider.com.

In what appeared to be a response, the provincial government of Zhengzhou announced on Dec. 25 that it would grant Foxconn 81.9 million yuan ($12.6 million), calling it an “unemployment-insurance workforce-stabilization-subsidy,” according to the Journal.

The company has embarked on a rebranding effort in the wake of a series of investigations finding poor working conditions, long hours and overcrowded and poorly maintained dormitories at many of the company’s plants.

In April, Foxconn allowed a reporter from Recode to take a guided tour of the company’s factory in Shenzhen, in the south China province of Guangdong.

A year earlier, the facilities once again became the subject of debate after a young worker at the Shenzhen factory, who was also an aspiring writer, committed suicide, leaving behind a series of poems that described his experiences, which were widely shared on Chinese blogs after his death in September 2014.

“I stand like iron by the assembly line, my two hands flying/ How many days and how many nights/ I stand there like that, falling asleep,” wrote 24-year-old Xu Lizhi, who had worked on factory assembly lines on and off since 2010 to support himself.

During Recode’s tour, a company spokesman described the facilities available to workers – who can also live elsewhere – as akin to a college campus, noting that it had several swimming pools, Internet cafes, and restaurants. The company offers counseling services and a 24-hour hotline for workers suffering from depression.

But several facilities, including the counseling center and a company-run labor union, appeared nearly empty or immaculately polished, suggesting that they may be sparsely used, Recode’s Dawn Chmielewski wrote.

“We entered one first-floor room (without obtaining the occupants’ permission, according to our translator) where four roommates occupy identical metal bunk beds, with thin mattress and mosquito netting on top, and a desk and storage underneath,” she wrote, adding, “It’s hardly ornate, but it didn’t give off a scent of rot, either.”

The company’s decision to curtail workers’ schedules comes in the midst of a Chinese economy that is slowing generally, but the Japanese newspaper Nikkei reported on Wednesday that Apple is also expected to reduce its output of iPhone by 30 percent from January to March. The decision is part of a move to let dealers sell off their existing iPhone stock before buying new phones, the paper reported, citing several parts suppliers.

Foxconn said in a statement that it was “in the midst of planning operational schedules for the Lunar New Year holiday,” but didn’t provide details, according to Reuters. The factory in Zhengzhou, which employs 200,000 workers, primarily makes iPhones.

The company told the wire service that the incentives from the Zhengzhou government were to “recognize companies that provide stable employment in the province,” saying they were the result of the company’s large number of workers there in 2014. Apple did not respond to a request for comment from the Monitor.

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to Why iPhone workers in China will take a break over the Lunar New Year
Read this article in
QR Code to Subscription page
Start your subscription today