Foxconn planning major costs cuts

(Image credit: Image Credit: Flickr / Ken Marshall)

Foxconn will be cutting its expenses by half next year, according to reports claiming that the Apple supplier is planning for a challenging 2019.

Bloomberg says an internal memo details how falling demand in a cutthroat market is forcing it to pull rank and reconsider things, going forward.

The company that builds screens for iPhones says it will cut its expenses by 20 billion yuan (£2.2bn) next year, and let go roughly 10 per cent of its non-technical staff. Foxconn spent £5.2bn in the past 12 months.

“The review being carried out by our team this year is no different than similar exercises carried out in past years,” Foxconn told Bloomberg in a written statement. “It’s designed to ensure the company’s teams and budgets are aligned with the current and anticipated needs of our customers, our global operations and the market and economic challenges of the next year or two.”

The consumer electronics industry has been slowing down in the past few years, as the tech plateaued. Laptop refresh cycles are getting longer, and people’s interest in smartphones is waning as new models give little to be excited about. At the same time, the price tag keeps rising.

Last week, four suppliers in three different continents have cut their revenue prognosis due to weak demand.

Image Credit: Flickr / Ken Marshall