A few months ago, it was implied that Apple's manufacturing operations in China were affected by the coronavirus outbreak. This prompted tech industry analysts to forecast major delays for new and old hardware. While the pandemic affected its original plans, the company was able to launch several products. The 2020 iPad Pro and MacBook Air released last month, while the second-generation iPhone SE debuted last week. Despite the promising outlook, contractors are allegedly reducing its workforce due to low demand.
The details come from Ars Technica, as it reveals the current situation with two of the company's biggest production partners. The information supposedly comes directly from the workers, who claim there have been ongoing layoffs. What makes this surprising is the fact it was recently reported that Chinese contractors for Apple were hiring in anticipation for the iPhone 12 series. Nevertheless, it seems that consumer demand is at an all-time low given the health crisis.
According to sources, Foxconn "has also begun to cut some of the temporary workers it hired in large numbers in February as it ramped up production after a long pause." Meanwhile, at Pegatron – another Apple contractor – in Shanghai said: "About a thousand temporary and third-party dispatched workers were fired." Tech market pundits pointed out an overall decline of global demand for smartphones such as the iPhone.
Last month, the Cupertino, California-based group shuttered its retail stores "outside of Greater China." Even its outlets in the U.S. are estimated to stay closed until public health officials allow non-essential establishments to reopen. However, the present state of affairs seems to suggest otherwise as the number of infections is still on the rise.
In February, there were shortages of iPhones reported and Apple quickly ramped up production to resupply its partners. Nevertheless, consumers are suddenly aware of the financial uncertainties SARS-CoV-2 brought to the table. In effect, buyers are focused on other important matters for now. In contrast, the gaming industry is reporting an overwhelming demand for video game consoles and accessories. It is unclear if the downsizing of its manufacturing workforce will come back to haunt the brand when the time comes to mass-produce the iPhone 12.