Even Foxconn is hurting with Apple cuts as it aims to cut $3 billion in spending
Many iPhone parts suppliers have been curtailing revenue forecasts after Apple sent a shock through the market with a warning of tepid demand. But we’re finally learning from Foxconn, the world’s largest contract electronics assembler, how badly the impacts are.
According to Bloomberg sources who have shared an internal order, the company formally known as Hon Hai Precision Corporation is aiming to halve its spending over the course of the next year — that’s a cut of about US$2.9 billion.
In particular, the company will need cut more than $865 million from its iPhone production business and perhaps as much as 10 percent of non-technical staff.
Foxconn responded to inquiries saying that operational reviews are routine and are meant to align the company “with the current and anticipated needs of our customers, our global operations and the market and economic challenges of the next year or two.”
The assembler is also preparing for a softening of the global mobile market as sales growth has slowed and many other verticals remaining more or less the same. This also means less room for revenue potential from its recent acquisition of display maker Sharp.