* Plays down link with "any single customer" amid FT report
* FT says recruitment has stopped as iPhone production slows
By Clare Jim and Jennifer Saba
TAIPEI/NEW YORK, Feb 20 Apple Inc's
manufacturing partner Foxconn Technology Group has frozen hiring
at a Shenzhen plant that makes gadgets including the iPhone 5
and put the brakes on recruiting for other factories across
China, but said the move was not linked to any single client.
Foxconn runs a network of factories across the world's No. 2
economy that make products for tech companies from Hewlett
Packard to Dell. It sought to pour cold water
on a Financial Times report that it had imposed a hiring freeze
while it slows production of Apple's latest smartphone.
"Due to an unprecedented rate of return of employees
following the Chinese New Year holiday compared to years past,
our company has decided to temporarily slow down our recruitment
process," the company said in a statement.
"This action is not related to any single customer and any
speculation to the contrary is false and inaccurate."
Like other Chinese contract manufacturers, Foxconn, the
trading name of Taiwan's Hon Hai Precision Industry Co Ltd
, relies on a large number of migrant labourers from
across the country who journey home for the most important
holiday of the year. Many do not make it back to work, but
Foxconn spokesman Louis Woo said this year they saw as many as
97 percent of employees return.
A Foxconn recruitment centre in an industrial suburb of
Shenzhen, where job-seekers register their names and mobile
numbers, was closed on Thursday.
"I've waited here four days now and I've spent a lot," said
Yang Jun, a hopeful migrant from Shanxi province, in northern
China. "I'm not sure how long I can hold out. If they don't
contact me soon I'll have to leave."
Apple sold a less-than-expected 47.8 million iPhones in the
2012 holiday quarter, fanning fears that its dominance of
consumer electronics is on the decline as Samsung Electronics Co
and other manufacturers that use Google Inc's
Android software gradually gain market share.
The iPhone is Apple's most important product, accounting for
half its revenue. The company's shares slipped almost 2 pct on
Wednesday to $451, and are down about 34 percent from their
September peak above $700, as investors fret about sliding
margins and intensifying competition.
IMPLICATIONS FOR APPLE
Apple watchers often take cues from its component suppliers
and manufacturing partners. In January, CEO Tim Cook took the
unusual step of warning investors that it is difficult to
extrapolate from limited "data points".
RBC estimates that just 70 to 80 percent of Chinese workers
return to factories it tracks.
"This year we believe the return rates have been closer to
90 percent, which may minimize the need to hire," RBC analyst
Amit Daryanani wrote in a Wednesday research note.
"Given the timing of the freeze, it may have more to do with
higher return rates of employees versus what was expected by
Foxconn and other supply chain companies."
Foxconn's latest statement contradicts another Foxconn
spokesman, Liu Kun, who is cited in the newspaper on Wednesday
as saying, "Currently, none of the plants in mainland China have
A check on Foxconn's recruitment website on Wednesday showed
the company's Taiyuan and Hangzhou plants were hiring. But its
factory complex in the southern city of Shenzhen is its single
largest production base.
The Shenzhen plant "is not hiring at the moment because
workers' return rate after Chinese New Year is very high this
year, reaching 97 pct", Woo said.
"We replenish each year depending on the return rate."