Following “a very difficult and competitive year,” iPhone manufacturer Foxconn plans to cut its operating expenses by approximately 20 billion yuan (roughly $3.9 billion CAD), according to an internal company memo obtained by Bloomberg.
Bloomberg‘s Debby Wu reported the same memo states that, by the end of next year, Foxconn will need to reduce operating expenses related to its iPhone business by 6 billion yuan (roughly $1.15 billion CAD) and cut approximately 10 percent of its non-technical staff.
As part of the restructuring, Foxconn intends to conduct a review of managerial staff who earn more than $150,000 USD (roughly $199,200 CAD) per year.
A similar report from the Wall Street Journal came out earlier this week stating that Apple planned to cut production orders for all three of its new iPhone models.
To date, Apple has been able to weather a global downturn in smartphone demand by selling new iPhone models at a higher average sales price.
However, that same strategy isn’t of any help to the company’s suppliers, who depend on increasing unit volumes to continue growing.