Apple Supplier Foxconn Offers Up To $1,800 Bonus To Employees To Stay At China's iPhone Plant

China's Zhengzhou campus, which normally houses upwards of 200,000 employees, is where the vast majority of Apple’s iPhone Pro models are assembled

Foxconn, which is also known as Hon Hai Precision Industry Co., will top up wages by as much as 13,000 yuan per month in December and January for full-time workers who’d joined at the start of November or earlier.

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Apple supplier Foxconn is offering bonuses of as much as $1,800 to existing workers at China’s Zhengzhou facility, hoping to sustain the staff levels it needs to run the world’s largest iPhone factory, reported by news agency Bloomberg on Monday.

The Bloomberg report stated that Foxconn, which is also known as Hon Hai Precision Industry Co., will top up wages by as much as 13,000 yuan per month in December and January for full-time workers who’d joined at the start of November or earlier, the company said in a notice over the weekend.

Last week, Foxconn offered similar bonuses for workers opting to leave its campus, largely to usher out new arrivals who’d participated in violent protests against virus lockdowns.

According to the report, the unusually generous bonus reflects Foxconn’s urgent need to get assembly lines back up to full speed after a month of dealing with Covid restrictions and disruptions that culminated in unrest last week. The Zhengzhou campus, which normally houses upwards of 200,000 employees, is where the vast majority of Apple’s iPhone Pro models are assembled.

More than 20,000 new hires are reported to have left after the protests. The departures of 20,000 employees would complicate Foxconn’s previous target of resuming full production by the end of November, following workers' unrest that rocked production unit at the world's largest iPhone factory, according to news reports.

Apple has said it’s working closely with Foxconn to restore operations and both companies have expressed a commitment to ensuring worker safety.

The iPhone 14 Pro and Pro Max are Apple’s most in-demand handsets this year, offsetting slumping sales for its regular iPhone 14 editions. The Foxconn situation serves up another reminder of the dangers for Apple of relying on a vast production machine centered on China at a time of unpredictable policy and uncertain trade relations.

The US firm warned this month that shipments of its newest premium iPhones will be lower than previously expected, just ahead of the peak holiday shopping season.

Analysts at Morgan Stanley cut their iPhone Pro output estimates for the current quarter by 60 lakh units earlier this month. In a worst-case scenario of prolonged lockdowns impacting assembly at Zhengzhou, Foxconn is seen risking as much as 36 per cent of iPhone revenue or 20 per cent of its overall sales in the quarter.

The labour unrest at the Zhengzhou plant that began last Wednesday marked rare scenes of open dissent in China which workers say was fueled claims of overdue pay and frustration over severe Covid-19 curbs.