China Labor Watch blames Jabil layoffs on declining iPhone 8 sales

According to China Labor Watch, a labor rights watchdog and advocacy organization, hundreds of workers went on strike on October 11, in protest of Jabil's layoff, position rearrangements and its refusal to provide previously promised rewards. This is based on workers' account.

Jabil is a United States-based global manufacturing services company. Headquartered in St. Petersburg, Florida, it is one of the largest companies in the Tampa Bay area. It has 90 facilities in 23 countries, including China, and 175,000 employees worldwide

Workers say the factories are laying off workers and rearranging workers' positions as iPhone 8 sales have slowed. Some workers at the Green Point factory have been reassigned to the Green Magnesium factory, where the salary and benefits are not as good, claims China Labor Watch. Both Green Point and Green Magnesium are factories in Wuxi province and affiliated with Jabil, a major supplier of components for Apple products.

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Workers on strike are also demanding that they receive a reward promised upon employment. Beginning in June, Jabil has been hiring large numbers of workers to manufacture Apple products. However, it has had difficulty recruiting enough workers due to poor labor conditions, according to claims China Labor Watch. Workers at Jabil earn around 1890 RMB ($286) per month. Workers normally work 11 hours a day and often have to stay late after work for an hour without pay. The living conditions are also worse than similar factories in the same industry.

In order to recruit more workers, Jabil worked with labor dispatch companies, which promised workers that if they work at the factory for more than 45 days, they would receive a reward from 4500 to 8000 RMB ($683 - $1214) in addition to wages, says claims China Labor Watch.

However, as iPhone 8 sales have declined and Apple has decreased its orders to Jabil factories, workers have not been able to work as much. The labor dispatch companies involved are now unwilling to provide promised rewards to workers who have worked for more than 45 days. Currently, these companies are requesting workers, which includes those who have worked at the factory for around 45 days, to leave or be reassigned to another factory.

However, other reports seem to indicate good iPhone 8 sales. Phone assembler Foxconn has reported revenues of NT$451.04B (US$14.83B) for September, up 42.4% on the previous month, but down 3.7% year-on-year. With revenue slightly down on last September, this suggests that initial iPhone 8 production is only slightly lower than that of the iPhone 7 last year. 

“Given the number of us waiting instead for the iPhone X, that would represent surprisingly good sales of the more iterative model. This is in line with a recent KGI report that iPhone 8 sales were better than expected,” notes 9to5Mac. “Foxconn’s October revenues are expected to be even higher thanks to the iPhone X.