Hon Hai to Lay Off 15 Percent of Manpower If Downturn Continues
8 October 2008
Hon Hai group, the Taiwan-based firm reportedly to be the world`s biggest electronics contract manufacturer, will lay off some 10 to 15 percent of its manpower by the end of this year if the global economy continues to downtrend, said its Chairman Terry Guo.
Guo announced such decision at a meeting with its global senior executives, saying the firm will cut inventories, accounts receivables and idle assets.
Hon Hai Group spokesman CA Ting noted regular personnel evaluation is a normal corporate procedure to boost operating efficiency. The world leading manufacturer has laid off 5 percent of manpower in each of the past several years.
The global financial fallout in the wake of the American sub-prime mortgage crisis that triggered tighter credit lines has impacted consumer confidence stateside and elsewhere-compromising the consumption of electronic items-which has forced Hon Hai sales short of expectations in the first nine months of this year. With the group`s global workforce numbering 600,000, Hon Hai`s proposed layoffs would put tens of thousands out of work by the end of this year.
Besides cutting inventories, accounts receivables and idle assets, Guo has also demanded resource integration within the group, as well as adopting energy saving measures to raise operating efficiency.
An institutional investor in Taiwan noted Hon Hai`s planned layoffs are in line with widespread manpower cutbacks in the wake of adverse impact from the sagging global economy. Besides, many Taiwanese-run factories in China, instead of labor reduction, have been moving to other Asian nations as Vietnam to cope with newly enacted labor protection laws.
The global economic downturn and resulting declining demand for consumer electronics is saddling Hai Hai for the group has aimed at annual growths of 30 percent in both sales and earnings this year.
