Foxconn halts recruitment in the mainland

Taiwan-based electronics manufacturing company Foxconn Technology Group Wednesday confirmed with the Global Times that the company has halted post-Spring Festival recruitment in the mainland, a move some analysts blame on automation while company sources point to lower turnover.

"Foxconn has for now halted the recruitment of workers at the mainland plants … Only the plant in Zhengzhou (capital of Central China's Henan Province) is now recruiting a small number of technical workers," Liu Kun, spokesperson for the company's mainland operation, told the Global Times Wednesday.

Many companies in the manufacturing sector need to recruit more workers, as the period after Spring Festival is a common time to change jobs. And Foxconn's post-Spring Festival recruitment has impressed many over the past few years with long lines of would-be-workers waiting in front of its recruitment desk.

The China Business News reported Wednesday that some of the company's plants have been known to hire over 5,000 workers in a single day during active recruitment.

Liu said that it is still not clear when the company will resume recruitment for this year.

The China Business News report also said that the company's Zhengzhou plant will not start any major recruitment before June this year, and that the halt in hiring may be related to a reduction in production of Apple Inc's iPhone 5.

Liu did not comment on such speculations, but said the halt is not an indication that the company is downsizing its production.

Foxconn is expanding rapidly in the Chinese mainland, where the number of employees has grown to the current 1.2 million from around 600,000 back in 2009, according to Liu.

He also said that the high return rate of workers after this year's Spring Festival may be a reason for the halt in recruitment, giving as an example Foxconn's Shenzhen plant, where nearly 97 percent of employees have decided to return after the holidays.

"The retention rate has been significantly higher after the company increased employees' salary in the mainland," Liu said. He noted that average salaries of Foxconn employees in the mainland have gone up by around 160 percent since 2010.

Li Youhuan, director of the Comprehensive Development Research Center at the Guangdong Academy of Social Sciences, said that the increasing use of manufacturing robots by Foxconn may also be a reason for Foxconn's recruitment halt.

Terry Gou, president of Foxconn, announced in 2011 a plan to replace some workers with 1 million robots by 2014 in order to cut rising labor expenses.

Gou also said in 2011 that Foxconn's industrial robot production base in North China's Shanxi Province is expected to top 50 billion yuan ($8.01 billion) in output by 2016.

"A higher level of automation will surely reduce labor use in the future, but it is unlikely that robots will totally replace human labor," Li said, noting that hiring has become increasingly difficult for Foxconn as more and more workers are unsatisfied with the company's highly repetitive jobs.