While some suppliers are planning job cuts due to slower than anticipated iPhone sales, Sharp is laying off some 3,000 foreign workers as production is transferred to a manufacturing plant in China. Sharp was purchased by Foxconn in 2016.
A report from Reuters reveals that the workers impacted by the change are based in Japan and the decision comes after a Foxconn facility is overtaking the production of sensors being used on iPhones.
Specifics aren’t available at this point, and Foxconn has refused to comment on the possible relocation. It’s being speculated that Foxconn was planning to move production of facial recognition sensors used on iPhones to Chinese plants, though details as to the reasons for the change weren’t offered.
It’s believed, however, that reduced manufacturing costs could be a key factor for this relocation, especially as sales of new iPhones haven’t reached expectations. Apple launched three iPhones this year, all of which feature facial recognition. The first iPhone with such capabilities was unveiled last year as iPhone X.
2018 iPhone sales
Apple’s new-generation iPhones are performing slower than anticipated in the majority of markets, and analysts are now lowering their forecasts, pointing to production cuts at most suppliers.
People with knowledge of the matter said Apple reduced orders at its partners several times as it tries to align production with demand, and all three 2018 models were impacted. iPhone XR, which is the most affordable model launched this year, was expected to be the best-selling device, and it previously accounted for more than 50 percent of all orders.
However, the high price of the device, coupled with the lack of significant upgrades versus the original iPhone X, made the 2018 iPhone lineup sell slower than Apple predicted. iPhone XS is available in the United States from $999, while the top-of-the-range iPhone XS Max reaches $1,449.