Just a few days ago, it was reported that Apple’s main iPhone assembler Foxconn was hit with a COVID-19 outbreak in China. The company subsequently lost many employees who were not willing to work under the government’s closed-loop production protocols.
Now, Foxconn has quadrupled bonuses for workers at its Zhengzhou plant in central China in an effort to retain workers.
Foxconn quadruples daily bonuses for workers
Earlier today, it was reported that iPhone production is estimated to fall by 30% next month since Foxconn’s factory in Zhengzhou is responsible for assembling the majority of Apple’s iPhones. The situation could not have come at a worse time for Apple as the forthcoming holiday season inches closer day by day. However, Foxconn is prioritizing iPhone production at another one of its facilities in Shenzen.
As for the latest development, the iPhone has raised the daily bonuses for employees to 400 yuan ($55) a day, up from 100 yuan ($13.77).
Following the latest COVID-19 outbreak at its facility, which impacted a small number of employees, Foxconn had no choice but to implement closed-loop production. A source told Reuters that this put the company’s workers in miserable conditions.” The source went on to say that “Initially there wasn’t enough to eat or drink,” and that essential supplies had to be shipped into the facility after the shortage caused “a sense of anxiety”, among workers.
As of right now, there is a culture of fear regarding COVID-19 among employees. But, according to reports, many workers are satisfied with the bonuses the company has started offering. A worker told Nikkei Asia that he was “very happy” about the increased bonus and that the majority of his co-workers are showing up for work as they normally do.
In response to what is going on with Foxconn, TF Securities analyst Ming-Chi Kuo revealed that Apple is in talks with other suppliers, Pegatron and Luxshare ICT, to ask them to switch production lines of the iPhone 14 and iPhone 14 Plus to the iPhone 14 Pro and Pro Max. The company is doing this so that it can keep up with the increasing demand for higher-end models while ensuring that the issues Foxconn is currently facing do not disrupt the majority of its production.
Kuo even said that “suppliers in China must learn to improve closed-loop production efficiency in response to the zero-Covid policy,” which rings true for Foxconn.