Foxconn became the latest Apple supplier to warn of anemic demand, with an internal memo suggesting that expenses will be cut by almost a half next year, according to Bloomberg.
The contract manufacturer aims to cut 20 billion yuan ($2.9 billion) from expenses in 2019 as it faces “a very difficult and competitive year,“ according to an internal document obtained by Bloomberg. The company’s spending in the past 12 months is about NT$206 billion ($6.7 billion).
“The review being carried out by our team this year is no different than similar exercises carried out in past years,“ Foxconn said in an emailed statement in response to Bloomberg queries. 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.“
Foxconn’s iPhone business will need to reduce expenses by 6 billion yuan next year and the company plans to eliminate about 10 percent of non-technical staff, according to the memo. The moves are likely to add to the gloom enveloping Apple and suppliers for the iPhone, its most important product. Just last week, four suppliers on three continents cut their revenue estimates because of weak demand. That set off a rout in technology stocks that has spread to the broader market in recent days.
Apple dropped into bear market territory this week, closing 24 percent below its October peak by Wednesday. On a single day last week, Lumentum Holdings, one of the suppliers that warned of soft demand, plunged 33 percent, while AMS tumbled 22 percent. This week, as concern spread, the S&P 500 erased its gain for 2018.
Taipei-based Foxconn assembles everything from iPhones and laptop computers to Sony PlayStations at factories in China and around the world. Foxconn has been hit by a slowing smartphone market, while trade tensions with the U.S. add to global uncertainty. Earlier this month its flagship Hon Hai posted earnings that were about 12 percent below expectations.
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Following the end of the public delisting acquisition offer for Telefónica Deutschland, Telefónica holds approximately 96.85% of the shares in its German subsidiary.
Infobip Shift Miami, the American version of the Croatian developer conference, this week brought together a diverse technology-sector audience on the shores of Florida.
