Demonetisation impact: Foxconn tells 2000 Indian workers to go on leave
The workers will be put on bench for two weeks, according to media reports. But, Foxconn is yet to respond on the developments, though experts say it may lay off 500-600 people by next month from its Noida factory.
The aftershock of demonetisation had begun to affect mobile industry as global contract giant Foxconn has ordered one fourth of its 8,000 workers in India to go on paid leave. Foxconn sales fell by 50% after demonetisation, said sources.
The workers will be put on bench for two weeks, according to a report that appeared in Economic Times on Monday. But, Foxconn is yet to respond on the developments, though experts say it may lay off 500-600 people by next month from its Noida factory.
Foxconn’s four plants in Sri City are currently operating at 1.2 million capacity/month, from their previous production of 2.5 million, a few months back, revealed company sources. Foxconn has manufactured more than half of the total handsets assembled in India, say experts, adding its decision to lay off workers will be disastrous for the industry.
The company may continue benching, if it does not see a rise in production to 2 million by next month, according to sources.
Foxconn’s venture in India has been projected as one of the greatest achievements of Prime Minister Narendra Modi’s ’s Make in India project.
Demonetisation has also badly affected country’s mobile phone industry as well, say industry insiders. Now most of the phones are being sold for less than Rs 5,000 and majority of the transactions are happening through cash only. Industry experts blame the reduced purchase power of customers for the crisis adding that sales now halved to Rs 175-200 crore after demonetision. There are only bleak chances for the industry to recover now, further added experts.
Reportedly, leading firms like Intex, Lava and Karbonn may go for lay off or bench 10-40% of workers to avoid inventory pile-ups in their retail channels after cash transactions plummeted after demonetisation hit the Indian economy.
Lava is reportedly closing its plant which had employed over 5000 people for one week from December 12. Leading mobile manufacturers Karbonn and Micromax are also planning to come up with similar steps in coming months.