It looks like Apple is currently scaling back on the production of iPhones according to new reports this week. Apparently, Apple is cutting down on its iPhone orders by 30 percent, which is having a knock-on effect on the Chinese suppliers, which have had to lay off staff due to the loss in business.
This news originally came from The Wall Street Journal, which claimed that Apple cut down its orders for the first quarter of 2016. As a result, job cuts have occurred at the factories responsible for building the iPhones and some investors haven’t been too happy with the news, with shares dropping by around 2.5 percent.
Additionally, shares in the supply companies affected by this substantial drop in orders have also been adversely affected. Foxconn apparently won’t need to cut staff, though, as the Chinese government has agreed to give it $12 million in subsidies to prevent any significant job cuts.
The reason for this drop in orders is apparently due to the fact that stock is piling up in retailers around the world, despite record sales of the iPhone 6S and iPhone 6S Plus. Production lines will likely receive a boost in orders once again later in the year.
KitGuru Says: A lot of supply companies in China rely on Apple’s business so a drop in production like this can have some long-reaching consequences. Hopefully, those affected by the job cuts land on their feet.