Foxconn cuts Chinese laborers, replacing them with 40,000 robots

Foxconn, the world’s leading supplier for Apple and Samsung, has introduced 40,000 robots across its manufacturing plants in an effort to deal with the increasing labor costs in China, Tencent Tech reported on Thursday.

Foxconn is among the major employers in China, employing about 1.3 million staff during peak production times, according to Fortune.

The company has over 30 manufacturing plants in mainland China. It ranked 31st among the Fortune Global 500 in 2015.

In China, the country sometimes dubbed as “the world’s factory”, assembly-line labor once had a reputation for being cheap and plentiful. In recent years, however, labor costs in China have been continuously rising.

Over the past few years, Foxconn has made a handful of efforts to cut labor costs using robots. In May, Foxconn replaced 60,000 factory workers with robots at one of its factories in the eastern Chinese city of Kunshan, the South China Morning Post reported.

It is worth mentioning that the 40,000 robots are essentially produced by Foxconn, except for some component parts which are supplied by third-parties, according to Tencent Tech.

A robot at Foxconn. photo from Tencent Tech.
A robot at Foxconn. photo from Tencent Tech.

The trend of robots taking low-end manufacturing jobs may expedite the process of China’s losing its status as the “the world’s factory”, because more and more global brands are moving their factories to Southeast Asia and Africa where the labor is cheaper than in China.

AllChinaTech in May reported that Foxconn was planning to open an iPhone plant in India.

A survey of 570 companies in Guangdong Province, Southeast China, showed that companies in that region had reduced their low-skilled workforces by an average of 5% between 2013 and 2014, Bloomberg reported.

In the southeastern Chinese city of Dongguan, whose economy is dominated by manufacturing companies, there were 4,000 factories shut down last year, according to The Beijing News.

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