Apple reduces iPhone production

Apple is scaling back its orders for iPhones, The Wall Street Journal reports, forcing its Chinese suppliers to lay off staff as they ready themselves for lower sales of Apple's flagship smartphone. People familiar with Apple's supply chain told the WSJ that the company has cut order forecasts for iPhones over the past few months. In response to decreased orders, Foxconn — Apple's main iPhone supplier — has been given $12 million of government subsidies to help it avoid mass layoffs.

Foxconn says that the money is simply an incentive provided by the city of Zhengzhou “in recognition of our company's contributions to maintaining our significant work force at our Zhengzhou facility throughout that year,” but a notice on the city government's website stated that the 81.9 million yuan ($12.6 million) grant was an “unemployment-insurance work-force stabilization subsidy.” Other sources also indicate that Chinese manufacturers have been dealing with a shortfall in Apple orders for a while now. In the last two months of 2015, a traditionally busy time for production, Chinese factories had some unexpected idle time, and according to the WSJ's sources, Foxconn started sending workers home early for the Chinese new year last month — two months early. (portfolio.hu)