iPhone creator Foxconn attracts furious employees in China as Apple meets supply crunch

December 6, 2022: Foxconn is offering big bonuses to attract employees back to its Zhengzhou, China factory behind labour unrest over a pay dispute experienced employee to walk out, which threatens to leave Apple with a decrease in iPhones for the crucial holiday season.

This month, employees attacked security personnel Zhengzhou plant, the world’s noteworthy iPhone factory run by Apple’s assembly partner Foxconn.

The unique worker unrest came following employees took to social media to air their grievances more than what appeared to be a delay in bonus payments. Taiwanese firm Foxconn subsequently apologized for what is known as a “technical error”, causing a discrepancy in pay from what was said to the staff.

Foxconn’s factory was also run by a Covid-19 outbreak last month, leading to workers removing the facility as the firm moved to control the epidemic by isolating infected people.

But with employees walking out of the factory, Foxconn is trying to make up a shortfall in staff, endangering the global iPhone supply.

Foxconn said Tuesday that it would give a 500 Chinese yuan ($70) payment to returning employees, a 3,000 yuan bonus for the one who stays over 30 days and a 6,000 yuan bonus for January. It comes a day after the firm said it would pay up to 13,000 yuan for some employees in December and January.

Analysts at Evercore ISI that shows the Zhengzhou factory accounts for over 70% of Apple’s iPhone display in the world, highlighting the Cupertino-based firm’s reliance on China as a hub, even as geopolitical tensions amid the U.S. and China increase and Beijing’s strict “zero-Covid” policy causes supply chain disruptions.

According to a note saying by Evercore ISI on Monday, the Zhengzhou protests and walkout will likely have a revenue impact on Apple.

Evercore ISI analysts say that iPhone demand can be affected by 5 million to 8 million units in the December quarter, mainly at the high end of Apple’s smartphone range. That could negatively affect revenue by $5 billion to $8 billion.