Foxconn, the world’s largest contract electronics manufacturer, has apologized after a revolt by thousands of workers at its iPhone factory in China. Because of the protests from employees over pay and working conditions, Foxconn’s brand was significantly impacted.
On Thursday, Foxconn (2317.TW) announced that a “technical error” had occurred during the recruitment process for new workers at one of its iPhone factories in China which have been impacted by the COVID-19 pandemic. The company apologized to its employees after this latest incident of labor unrest rocked the organization.
On Wednesday, as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou City, China, men smashed surveillance cameras and got into physical altercations with security personnel. This rare display of open dissent was spurred by allegations of overdue pay and mounting frustration over severe COVID-19 restrictions.
Electronics giant, Apple Inc’s (AAPL.O) supplier is being accused of delaying bonus payments to its employees and forcing them to share dormitories with those who have tested positive for COVID-19, as seen in videos circulated on social media.
“Our team has been looking into the matter and discovered a technical error occurred during the onboarding process,”
–Team Foxconn stated in a statement while talking about the hiring of new workers.
They further added-
“We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and the official recruitment posters.”
However, the error was not elaborated on. This apology was a complete turnaround from what Foxconn said only 24 hours ago – that they had already fulfilled their payment contracts.
As China combats a recent resurgence in COVID-19 cases, lockdown protocols have caused fury among the citizens. In addition to displaying communication difficulties, this unrest has also uncovered a lack of faith that Foxconn management holds amongst some employees.
The biggest protests had begun to die down, and the company was now talking with employees who were still engaging in smaller protests, a source close to Foxconn told Reuters on Thursday.
This individual said that the organization had reached “initial agreements” with these employees in order to resolve the dispute; meanwhile, production at the plant was continuing without interruption.
Since strict quarantine rules, COVID outbreaks and shortages of food implemented by management had caused much employee unrest, many workers had left the factory campus since October. The closed-loop system isolated the plant from society.
Because many workers had fled, new recruits were hired to take their place – an estimated thousands, according to some sources.
The Taiwanese company stated that it would accept the resignations of new recruits who wanted to leave the factory campus and would provide them with “care subsidies”. The Foxconn source said that each worker would receive 10,000 yuan ($1,400).
The Foxconn Zhengzhou plant is home to over 200,000 workers and covers a sprawling 1.4 million square meters. The facility includes dormitories, restaurants, basketball courts, and a football pitch.
The factory produces Apple devices including the iPhone 14 Pro and Pro Max, and it accounts for 70% of global iPhone shipments.
Apple stated that its team was present at the factory and is currently “working closely with Foxconn to ensure employees’ concerns are being addressed.”
Protests from workers might have an unclear impact on production for November, according to a Foxconn source familiar with the matter. They noted that it might take a few days to determine the effect, as the factory is large.
According to another source, the unrest has made it impossible for them to resume full production by the end of this month.
The Foxconn Zhengzhou plant incident serves as a reminder that tensions can quickly bubble up and put the production of products at risk. It also shows how difficult it is to balance work conditions with health concerns in the era of COVID-19, particularly when companies are under pressure to fulfill orders.
It remains to be seen if Foxconn can reach a satisfactory resolution with employees and ensure the production of Apple devices continues smoothly.
Shivendra Tiwari is an Engineer and an MBA in Marketing. He is the Content head at Marketing91 and a thorough Online Marketing enthusiast. Shivendra loves to follow different brands and study their Business and Marketing tactics.