Apple supplier to lay off over 400 workers

2019/02/12 13:30:55 fontsize-small fontsize-default fontsize-big
Apple supplier to lay off over 400 workers

Taipei, Feb. 12 (CNA) Career Technology (Mfg.) Co., a supplier of flexible printed circuit boards (FPCBs) to Apple Inc., has decided to lay off more than 400 employees later this month.

Speaking to CNA on Monday, a Career official said the company will lay off 434 workers at its plant in Guanyin District in Taoyuan on Feb. 21 because of deteriorating market conditions that have left Career no choice but to scale back its workforce.

After the layoffs, Career will maintain 200-300 employees at its Guanyin plant, while its 2,000 employees at its Shulin plant in New Taipei will remain unscathed.

Career also has three plants in China's Kunshan, Suzhou and Shenzhen, but no workforce reductions are planned at those locations, either, the company said.

Taoyuan's Labor Department said it will fine Career for the scheduled layoffs because the company failed to report them as required by law.

Rumors emerged before the Lunar New Year holiday that began on Feb. 2 that Career had forced 200 full-time employees to sign voluntary resignation papers to avoid having to pay them severance.

Career denied the rumors, calling the situation a misunderstanding, according to the Labor Department.

The company said at the time it gave employees an application form offering three options -- resignation, retirement, or being laid off -- and the employees must have mistook that for a voluntary resignation form.

The Career official said Monday the company will handle the 434 layoffs based on the law and pay severance as required.

Career's Guanyin plant churns out components for Apple's iPhones, and market sources said the layoffs largely reflected the weaker than expected demand for the latest iPhones unveiled in September 2018.

In addition, the sources said, the electronics industry is entering its traditional slow season, and a fall-off in the utilization of Career's production capacity usage also led to the layoffs.

The company said the workforce reduction at the Guanyin plant is expected to help it optimize its operations during the current difficult times.

Meanwhile, Career denied market speculation that it will sell its Guanyin plant to rival Zhen Ding Technology Holding Ltd., saying the factory is cutting back its production but is not up for sale.

As of 1:11 p.m. Tuesday, shares of Career had gained 1.17 percent to NT$26.00 (US$0.84), bouncing back from an early low of NT$24.90, which represented a 3.11 percent fall from the previous closing level in the wake of the layoffs, analysts said.

(By Jiang Ming-yan and Frances Huang)
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