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iPhone: Article

Foxconn Hiring Freeze Sends Apple into a Tizzy

Foxconn claimed the hiring freeze had nothing to do with iPhone 5 production

Word that contract manufacturer Foxconn had stopped hiring across its Chinese plants sent Apple stock into a tizzy this week on an assumption by the Financial Times that the bottom had dropped out of demand for iPhones, Apple's bestselling and most profitable product.

Foxconn claimed the hiring freeze had nothing to do with iPhone 5 production, which Apple has already said should be less this quarter than last, but happened because more workers came back to work after the Lunar New Year than usual or expected.

UBS analysts Steve Milunovich thought maybe it had to do with cutbacks in orders from HP, which represents about 8%-10% of Foxconn sales, ya know, desktop PCs, printers and some servers.

During his last earnings call Apple CEO Tim Cook warned about conflating a single data point or two from the supply chain and Foxconn denied the hiring freeze was related to any single customer, adding that "any speculation to the contrary is false and inaccurate."

Foxconn is also supposed to be installing robots.

The freeze is reportedly on until the end of March.

An iPhone 5S is expected this summer.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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