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Apple supplier Foxconn starts new hiring spree at world's largest iPhone factory in China ahead of next product launch

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Foxconn, the world's biggest electronics contract manufacturer, has started hiring new trainees and assembly line workers, raising the bonus each person gets to 9,000 yuan (US$1,345) when they stay on the job for more than four months upon enrolment, according to the latest recruitment notice published on Monday by the firm's integrated Digital Product Business Group, the division responsible for iPhone production.

The Taiwanese company, formally known as Hon Hai Precision Industry, has also accelerated signing up returning Zhengzhou employees, offering them the same salary for positions they held before leaving the firm as well as a 9,500 yuan bonus after four months on the job, according to the Foxconn post.

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The large-scale hiring campaign comes after Foxconn's move to suspend recruitment of assembly line workers in May, when the Zhengzhou local government imposed a seven-day lockdown in the city as part of Covid-19 control measures.

Jobseekers form a queue outside Foxconn Technology Group's gathering point for new recruits in Zhengzhou, capital of central Henan province, on October 15, 2020. Photo: SCMP alt=Jobseekers form a queue outside Foxconn Technology Group's gathering point for new recruits in Zhengzhou, capital of central Henan province, on October 15, 2020. Photo: SCMP>

Foxconn typically rolls out hiring incentives every summer to boost production at its Zhengzhou plant, which accounts for 80 per cent of the iPhones released worldwide, months ahead of Apple's annual launch of new models of its flagship product.

In June last year, returning Zhengzhou assembly line workers were each offered a signing bonus of 8,000 yuan. Last August, new recruits received a record-high bonus of 10,200 yuan for staying at least 90 days on the job after enrolment.

Ramping up recruitment in Zhengzhou reflects Apple and prime supplier Foxconn's efforts to quickly move past the challenges brought by China's strict zero-Covid-19 policy, which resulted in major disruptions at their mainland supply chain, including closed factories and rising logistics costs.

The entrance to Foxconn Technology Group's vast manufacturing complex in Zhengzhou, capital of central Henan province. Photo: Weibo alt=The entrance to Foxconn Technology Group's vast manufacturing complex in Zhengzhou, capital of central Henan province. Photo: Weibo>

Foxconn's latest recruitment drive is expected to scale up cash rewards to woo more workers back in the following months, as the contract manufacturer tries to provide a stable level of production, said Ivan Lam, Hong Kong-based analyst at Counterpoint Research.

Global shipments of smartphones, however, are predicted to shrink by 3 per cent this year amid supply chain disruptions partly attributed to China's faltering economy, which has been slowed by Covid-19 lockdowns, and the war in Ukraine. Total smartphone shipments are expected to reach 1.36 billion units this year, down from 1.39 billion in 2021, according to the latest global forecast from Counterpoint.

The months-long lockdown in Shanghai and rigid Covid-19 control measures implemented across the broader Yangtze River Delta, for example, significantly affected the operations of more than half of Apple's 192 suppliers that manufacture on the mainland.

A billboard of Apple's popular Apple 13 line is seen in Shanghai on May 3, 2022. Photo: Shutterstock alt=A billboard of Apple's popular Apple 13 line is seen in Shanghai on May 3, 2022. Photo: Shutterstock>

Apple could consider reallocating some orders for new iPhones to other contractors on the mainland in case Foxconn's manufacturing activity gets slowed down by potential new disruptions, Counterpoint's Lam said. He indicated that it was unlikely for Apple to produce these new devices outside China.

The possibility of continued supply chain disruptions on the mainland has prompted Apple to consider relocating some of its vast contract manufacturing ecosystem to India or Vietnam, but such a move has largely been hindered by the lack of skilled labour and governance risks.

This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2022 South China Morning Post Publishers Ltd. All rights reserved.

Copyright (c) 2022. South China Morning Post Publishers Ltd. All rights reserved.