Source: Foxconn’s problems will take a bigger toll on the giant iPhone factory in China as more workers leave

TAIPEI, Nov. 25 (Reuters) – Foxconn (2317.TW) A major iPhone factory in China is set to see an even bigger drop in its shipments in November due to the latest wave of worker unrest this week, a source familiar with the matter said Friday, as thousands of employees left the site.

The company could now see more than 30% of the site’s production affected in November, up from an internal estimate as high as 30% when the plant’s worker problems began in late October, the source said.

The source added that the site, which is the only factory where Foxconn makes premium iPhone models, including the iPhone 14 Pro, is unlikely to resume full production by the end of this month.

The largest Apple company in the world (AAPL.O) The iPhone factory is grappling with tough COVID-19 restrictions that have sparked discontent among workers and disrupted production ahead of the Christmas and Lunar New Year holidays in January, as many workers were isolated or fled the factory.

It raised concerns about Apple’s ability to deliver products for the busy holiday period.

On Wednesday, workers, most of them new recruits hired in recent weeks, clashed with security personnel at a Zhengzhou factory in central China.

Many claimed they were misled about compensation benefits at the factory, and others complained about sharing dormitories with colleagues who tested positive for COVID.

Foxconn apologized for a wage-related “technical error” when hiring on Thursday, and later offered 10,000 yuan ($1,400) to protest new recruits who agreed to quit and leave.

The source said that more than 20,000 workers, most of whom are new employees who have not yet worked on production lines, have taken the money and left. Videos posted on Chinese social media on Friday showed crowds and long lines of workers laden with luggage lining up to wait for buses.

One wrote: “It’s time to go home.”

Foxconn, formally known as Hon Hai Precision Industry Corporation, declined to comment. Apple, which said Thursday it has employees at the factory, did not immediately respond to a request for comment on Friday.

The plant employed, before it began its ravages, more than 200,000 employees. It has dormitories, restaurants, basketball courts, and a soccer field across its sprawling facility of approximately 1.4 million square meters (15 million square feet).

Another Foxconn source familiar with the matter said some new employees had left campus, but did not say how many. This person said that since the people leaving had not yet been trained or started, their departure would not cause further damage to the current production.

“The accident has a big impact on our public image, but it has little impact on our (current) capacity. Our current capacity has not been affected,” the source said.

This person said, referring to other worker disruptions caused by the strict COVID restrictions, including disruptions at another Apple supplier, Quanta. (2382.TW)in May.

Foxconn shares closed down 0.5%, lagging the broader market. (.TWII) which finished flat.

($1 = 7.1616 CNY)

Reporting by Yimou Lee; Additional reporting by Brenda Goh. Editing by Anne Marie Rountree, William Mallard and Jerry Doyle

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