Apple supplier Foxconn apologises, offers new hires $1,400 to quit

Foxconn said on Thursday a pay-related “technical error” occurred when hiring new recruits at a Covid-hit iPhone factory in China and apologised to workers after the company was rocked by fresh labour unrest.

The group has begun offering a 10,000 yuan ($1,400) incentive to staff in China who choose to leave, an unusual decision announced after violent protests rocked the world’s largest iPhone factory.

Apple’s main global production partner said in an online notice the sum, to be paid out in two installments, will help smooth the journey home for employees. Many of the 200,000-plus workers at Foxconn’s main plant in Zhengzhou hail from elsewhere in the province or country.  A company representative confirmed the initiative.

The incentive, which in general exceeds a month’s wages for Foxconn’s blue-collar staff, is likely to appease employees who on Wednesday staged a rare violent protest that trained a spotlight on the economic and social toll of Xi Jinping’s Covid Zero strategy.

Men smashed surveillance cameras and clashed with security personnel as hundreds of workers protested at the world’s biggest iPhone plant in Zhengzhou city, in rare scenes of open dissent in China sparked by claims of overdue pay and frustration over severe Covid-19 restrictions.

Workers said on videos circulated on social media that they had been informed that the Apple supplier intended to delay bonus payments. Some workers also complained they were forced to share dormitories with colleagues who had tested positive.

“Our team has been looking into the matter and discovered a technical error occurred during the onboarding process,” Foxconn said in a statement, referring to the hiring of new workers.

“We apologize for an input error in the computer system and guarantee that the actual pay is the same as agreed and in the official recruitment posters.”  It did not elaborate on the error.

The apology was an about-face from a day earlier when Foxconn said it had fulfilled its payment contracts.

The unrest comes at a time when China is logging record numbers of Covid-19 infections and grappling with more and more lockdowns that have fuelled frustration among citizens across the country. But it has also exposed communication problems and a mistrust of Foxconn management among some staff.

The largest protests had died down and the company was communicating with employees engaged in smaller protests, a Foxconn source familiar with the matter told Reuters on Thursday.

The person said the company had reached “initial agreements” with employees to resolve the dispute and production at the plant was continuing.

Apple risks

Home to over 200,000 workers, Foxconn’s Zhengzhou plant, the factory makes Apple devices and accounts for 70 per cent of iPhone shipments globally.

Apple said it had staff at the factory and was “working closely with Foxconn to ensure their employees’ concerns are addressed.

Several shareholder activists told Reuters the protests showed the risks Apple faces through its reliance on manufacturing in China.

“The extreme dependence of Apple on China, both as a (consumer) market and as its place of primary manufacturing, we see that a very risky situation,” said Christina O’Connell, a senior manager for SumOfUs, a nonprofit corporate accountability group.