Categories Consumer, Technology

Apple supplier Foxconn looks to cut costs and jobs in preparation for tough year

Foxconn Technology Group, the major supplier to Apple Inc. (AAPL), is planning to cut down costs significantly in preparation for a tough and competitive year in 2019, according to a report by Bloomberg. This cost reduction plan will include the elimination of jobs.

apple supplier foxconn plans costs and jobs cuts
Picture Courtesy:

Foxconn is looking to cut around $3 billion in expenses in 2019 and these include cost cuts at its iPhone assembly division as well. The company is also planning to cut jobs and this is currently estimated to comprise 10% of its non-technical team.

While Foxconn has attributed these actions to a business planning process that it undertakes every year, the fact that the company is Apple’s top supplier has sparked concerns over slow iPhone sales. Apple recently disclosed that it will not report unit sales hereafter and analysts suspect this could signal weakness in iPhone unit sales in the near term.

Goldman Sachs lowered its price target on Apple citing weak demand for iPhones in China and other emerging markets. Foxconn is also struggling with weakness in the smartphone market as well as trade concerns between the US and China.

Apart from Foxconn, other Apple suppliers have also lowered their revenue outlooks due to reductions in orders. While Apple has shifted its strategy to focus more on services, its suppliers are still dependent on volume.

FAANG stocks lose their sheen in tech rout

These lowered outlooks and reductions on the part of suppliers have led to a drop in Apple’s stock. Over the past two days, the company has been in a bear market, which refers to a drop of 20% or more from its 52-week high. Apple’s shares saw a slight recovery on Wednesday and as of 2:35 pm ET, the stock was up 0.58%.


Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips.

Most Popular

Does Unity Software (U) stock has more room to run?

Last month, the IPO market was in a full swing. IPOs of Snowflake (NYSE: SNOW) and JFROG (NASDAQ: FROG) had an impressive opening day in September, the former creating a

PepsiCo (PEP): Steady snacking habits amid pandemic drive strong quarter for beverage giant

PepsiCo Inc. (NASDAQ: PEP) beat market expectations on both revenue and earnings for the third quarter of 2020. The company saw the momentum continue in its snacks business while the

Does the virus-driven boom make Electronic Arts (EA) a good investment?

With more and more people turning to virtual entertainment sources, amid the virus-related movement restrictions, video game publishers like Electronic Arts (NASDAQ: EA) are witnessing unusually high demand. Not surprisingly,

One thought on “Apple supplier Foxconn looks to cut costs and jobs in preparation for tough year

Leave a Reply

Your email address will not be published. Required fields are marked *

Add Comment

Viewing Highlight