Huffpost Business

Foxconn Stops Hiring In China As Experts Worry About iPhone 5 Decline

Posted: Updated:
FOXCONN STOPS HIRING
In this Wednesday, May 26, 2010, file photo, staff members work on the production line at the Foxconn complex in Shenzhen, China. (AP Photo/Kin Cheung, File) | AP

Foxconn Technology Group, the manufacturer of a slew of consumer electronics including several Apple products, has temporarily stopped recruiting new workers in China.

According to Bloomberg, Foxconn -- described as the world's largest contract electronics manufacturer -- will stop hiring at least until the end of March.

Foxconn's hiring freeze in China has prompted many industry pundits to speculate as to the reasons behind the slowdown. Some are pointing to the iPhone's decline as a possible cause.

In a Wednesday report, the Financial Times speculated that Foxconn's decision "underscores the weakening demand for some Apple products," adding that the hiring freeze had been "in response to reduced orders for the iPhone 5."

However, Foxconn has been quick to quell these rumors. A spokesperson for the company told CNET that the recruitment freeze was not related to any one customer, and that the decision was "due to an unprecedented rate of return of employees following the Chinese New Year holiday compared to years past."

Still, as industry experts point out, Apple's iPhone has indeed taken a hit in recent months.

Writes Bloomberg:

Growth has been slowing as the global smartphone market becomes more saturated and rivals including Samsung Electronics Co. introduce cheaper handsets based on Google Inc.’s Android software. Apple will sell 38 million iPhone 5 units this quarter, 20 percent less than the prior period, predicted Alexander Peterc, an analyst at Exane BNP Paribas.

Reuters notes that Apple's stock took a slight hit Wednesday on news of Foxconn's hiring freeze. "The iPhone is Apple's most important product, accounting for half its revenue," writes Reuters. "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."

At press time, Apple shares were still trading above $450, according to Google Finance.

Apple on Wednesday afternoon had yet to respond to news of Foxconn's recruitment freeze.

Around the Web

Apple Declines After Assembler Foxconn Stops Hiring

Foxconn freezes recruitment in China

Foxconn: Hiring Freeze Not Related to iPhone 5 Demand

The Markets Now: Apple Falls After Foxconn Hiring Freeze

Apple Declines After Assembler Foxconn Stops Hiring - Bloomberg

Apple Falls After IPhone Builder Foxconn Halts Hiring - Businessweek

Foxconn reportedly halts hiring due to slow iPhone 5 production ...