Mass resignation of technical staff at Foxconn's huge Chinese plant making iPhone 14 has hit Apple hard, potentially upsetting its production and delivery targets for the busy holiday season.
Foxconn's Zhengzhou plant, which produces Apple's popular iPhone 14 models, accounts for 70 percent of global iPhone shipments. The plant witnessed a rare staff strike earlier this week, resulting in clashes between the Chinese police and the factory workers.
The employees who resigned are mostly new recruits who have to undergo training before starting work on the production lines, Reuters reported. On Thursday, reports had said that Foxconn, leading Taiwanese company, had offered $1,400 to the protesting staff for agreeing to leave the premises.
30% Production Decline
Also on Friday, the news agency reported separately that production at the plant may plunge by at least 30 percent due to the staff unrest. "Following this week's bout of worker unrest at the plant, the source added, it was 'impossible' for the company to resume full production by the end of the month - a deadline it had set internally before Wednesday's wave of protests," the report said.
Tension had been building up at the Apple plant for weeks following the rise of Covid-19 cases at the factory. The huge Foxconn plant employees upwards of 200,000 employees. In an apparent bid to contain the outbreak, Foxconn had reportedly asked workers to stay on the production line as the holiday season approached. Workers were also upset over some of the compensation terms, including the expected additional remuneration for working through a pandemic.
The protests that erupted on Tuesday, turned violent a day later, with hundreds of them fighting with Chinese police clad in hazmat suits. The officers were seen hitting protesters with batons and metal rods even as the workers were seen tearing down fences.
With at least 20,000 new recruits leaving the plant, Foxconn's ability to meet delivery deadlines will be seriously affected. The new recruits were offered meaty bonuses after the completion of the first and second months on the job but the company allegedly changed the payout dates and terms after they joined.
Under the changed guidance, the workers were obliged to work through the Chinese New Year holidays, triggering massive unrest. As the protests turned violent, Foxconn apologized for the mess, admitting that a technical glitch was responsible for the confusion over the payout.
Apple told CNN Business that it was watching the situation in China. "We are reviewing the situation and working closely with Foxconn to ensure their employees' concerns are addressed," the tech giant said.
China's Covid-19 lockdown and the rise in outbreaks have affectd many international companies. Tesla's Shanghai plant was shut down a few times this year due to the harsh Covid-19 lockdown policies. Automakers Volkswagen and Toyota also had to halt work at their Chinese plants this year.