In response to questions, Foxconn told Bloomberg that the review being carried out this year is “no different than similar exercises carried out in past years,” to make sure teams and budgets are working according to company and customer needs and that global operations are aligned with the market and economic challenges expected for the next “year or two.”
Foxconn’s iPhone business will need to lower expenses by CNY 6 billion next year and the company plans to eliminate about 10 percent of non-technical staff, according to the memo. The company will conduct an in-depth review of managers paid over USD 150,000, according to the memo. Other cuts include a planned CNY 3 billion reduction in expenses at Foxconn Industrial Internet, Foxconn’s Shanghai-listed offshoot.
Apple reportedly lowered production orders for its latest iPhone models. In general, Apple suppliers along the entire supply chain have been having difficulties gauging market demand for Apple products. Suppliers Qorvo, Lumentum and Japan Display all recently lowered their profit guidance, citing a reduction in previously-placed orders from a large customer. Apple was not named, but it accounts for a third to half of revenue for these companies, according to filings and estimates. Ams also lowered its outlook, citing "demand changes" at a major consumer customer.
Dialog Semiconductor said it now expects flat revenues for next year, due to the slowdown in business with Apple.
