Foxconn, an electronics maker that is known for being the largest firm in its sector in the entire world is not generating strong revenue.
The company has reported that its revenue for November has recorded a sharp drop. The information has been shared by the officials at Foxconn.
Foxconn is Facing Losses
Foxconn released its earnings report on Monday where they have reported that its revenue has exhibited a major dip. The company has failed to generate the revenue that the analysts predicted.
The major reason behind the loss in the recent quarter is the worsening COVID situation in China. The COVID outbreak in China caused the shutdown of the business sector in the country.
With COVID safety measures such as the daily COVID tests have left the Chinese locals and the different company workers devastated.
These are the people who have to go through the daily COVID checks for commuting purposes. Due to these issues, the entire iPhone factor in China is facing major unrest.
The workers in the Chinese iPhone factory are unhappy with the daily checks and they are now protesting against them.
Multiple incidents have been reported where the workers lost their composure against the medical teams conducting the COVID tests.
Foxconn has reported that in November, the total revenue they generated was worth 551.1 billion new Taiwan dollars. This amount translates to a total of $18.05 billion.
Compared to the previous month of October, the firm’s sales are down 29%. As for the same quarter from the past year, the company’s revenue has plummeted by 11%.
The fall they have recorded in the revenue is due to the production phase entering the season considered off-peak. Then there is the epidemic in Zhengzhou due to the COVID causing an impact on shipments.
Foxconn runs the largest iPhone assembly plant in China, which is located in Zhengzhou. The particular region has been under great stress and faced lockdowns due to the COVID-19 situation.
Apart from the above, the company has not provided many details on the losses and reductions they have recorded in sales.
Situation in Zhengzhou
For Foxconn, the major challenge in Zhengzhou was to have their workers tested and separate the infected workers from the normal workers.
The company has been trying its best to deal with the situation and has tried keeping its infected workers in isolation for their safety and fast recovery.
However, the company had to face a major issue when the workers started to flee the factory. The workers who were not infected were concerned about their safety due to the infected ones.
Therefore, as the outbreak became aggressive, the workers started to flee, which caused several disputes and altercations.
According to local sources, many employees at the particular assembly plant in Zhengzhou clashed with security personnel.
There were those who shared their anger and grievances about the entire matter through social media channels. They shared their concerns about not receiving the bonus payments as they were delayed.
Foxconn later confirmed that the delay had been caused due to a technical glitch but they fixed the problem as soon as it was highlighted. They later confirmed that all the bonus payments had been transferred.
The bonuses had been announced by Foxconn for the workers to retain the workers agitated with the overall situation in Zhengzhou.
For COVID, the company has announced that they have the situation under control in Zhengzhou. However, the company has not provided any details about their dealing with the worker situation in the region.
Impact on Apple’s Business
Foxconn has reported that due to the recent issues, the revenue of their biggest client, Apple has been impacted negatively. The tech giant’s revenue has plummeted between $5 and $8 billion.
Following the announcement, the company’s stocks have dipped 0.97%, while Apple’s shares have dipped 1.26%.