Foxconn Freezes Hiring, iPhone 5 Demand Waning?

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Foxconn, the company responsible for manufacturing Apple’s iPhone and iPad lineup, has frozen recruitment at all of its factories across China due to slowing sales of the iPhone 5 and iPad, which is the first time the company has had to scale back hiring since the financial crisis in 2009.

According to a Foxconn spokesperson, “none of the plants in mainland China have hiring plans” and the Financial Times has tied the downturn to weakening demand for some Apple products:

Human resources officials at Foxconn’s largest factories, local government officials and external recruiters working with the company said there had been internal notices on Tuesday and Wednesday to halt hiring until at least the end of March, in response to reduced orders for the iPhone 5.

Recruiters have also told the Financial Times that iPhone 5 and iPad lines have stopped hiring employees at the Shenzhen plant recently. The report is now, hours after being reported, being denied by Foxconn. The company has indicated that the hiring freeze is “due to a higher return-rate than expected following the Chinese Lunar holiday” and not iPhone 5 demand.

The second and third generation iPad was announced and released in March (2011,2012), so traditionally we’ve seen an iPad announcement around this time of year. If that continued to be the case, Foxconn would likely be scaling up its hiring, and not freezing things. The fourth generation iPad and iPad mini, however, were announced in October (2013), so there’s a good chance that iPad releases have been placed on a new fall based schedule. Apple also recently released a silent “spec” update to the iPad 4 in January, so it’s unlikely that we’ll see anything on the iPad front in the short term. The iPhone seems to also have been moved to a fall release schedule with the iPhone 4S and iPhone 5 being released in October and September the last two years (2011, 2012).

That could be a major tell about why Foxconn is in a holding pattern at some of its factories. If there’s nothing new to release in the short-term, why would the company hire anyone?

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