Over 20,000 new hires have left Apple supplier Foxconn's major China plant -source By Reuters

© Reuters. FILE PHOTO: The logo of Foxconn is seen outside the company’s building in Taipei, Taiwan November 10, 2022. REUTERS/Ann Wang

By Yimou Lee

TAIPEI (Reuters) -More than 20,000 employees at Apple Inc (NASDAQ:) supplier Foxconn’s huge Chinese plant, mostly new hires not yet working on production lines, have left, a Foxconn source familiar with the matter told Reuters on Friday.

The departures from the world’s largest iPhone factory deal a fresh blow to the Taiwanese company that has been grappling with strict COVID-19 restrictions that have fuelled discontent among workers and disrupted production ahead of Christmas and January’s Lunar New Year holiday.

Concerns are mounting over Apple’s ability to deliver products for the busy holiday period as the worker unrest lingers at the Zhengzhou plant, which produces the U.S. company’s popular iPhone 14 models.

The departures will complicate Foxconn’s target of resuming full production by the end of November, after the sometimes violent unrest, the source said.

Foxconn, formally known as Hon Hai Precision Industry Co, declined to comment. Apple, which said on Thursday it had staff at the factory, declined to comment on Friday.

In a rare case of open dissent in China, employees have complained about sharing dormitories with colleagues who tested positive for COVID. They claim they were misled over compensation benefits at the factory that accounts for 70% of global iPhone shipments.

Foxconn on Thursday offered 10,000 yuan ($1,400) to protesting recruits who agreed to resign and leave the plant.

The company apologised for a pay-related “technical error” when hiring, which workers say was a factor that led to protests involving clashes with security personnel.

Videos posted on Chinese social media on Friday showed crowds and long lines of luggage-laden workers queuing for buses. “It’s time to go home,” one person posted.

Another Foxconn source familiar with the matter said some new hires had left the campus but did not elaborate on how many. This person said the departures had no impact on current production, as the new staff still needed to take training courses before working online.

“The incident has a big impact on our public image but little on our (current) capacity. Our current capacity is not affected,” the source said.

“There’s only so much corporate can do on pandemic prevention … It’s been a problem for a while. This is a problem faced by everyone,” the person said, pointing to other worker unrest triggered by rigid COVID restrictions, including upheaval at another Apple supplier, Quanta, in May.

The unrest at the Foxconn plant comes as China logs record numbers of COVID infections and grapples with increasing lockdowns that have fuelled frustration among citizens across the country. It has also exposed communication problems and a mistrust of Foxconn management among some staff.

Foxconn launched a hiring drive this month, promising bonuses and higher salaries after it had to enact COVID curbs in October. The restrictions forced the company to isolate many employees, prompting several to flee.

($1 = 7.1616 renminbi)

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By Reuters