Foxconn denies weak iPhone demand led to hiring freeze

Taiwanese contract manufacturer, Foxconn, has halted hiring activities at its Shenzhen plant which makes gadgets such as Apple iPhone 5 device, and slowed down recruitment at other Chinese factories. The company, however, has flatly denied weak iPhone 5 demand prompted the move.

"Due to an unprecedented rate of return of employees following the Chinese New Year holiday, compared to years past, our company has decided to temporarily slow down our recruitment process," Foxconn said in a statement, according to a Reuters report Thursday. "This action is not related to any single customer, and any speculation to the contrary is false and inaccurate."

The report said the comment was a response to a Financial Times report on Wednesday which said the Taiwanese manufacturer had imposed a hiring freeze in China as it saw slowing production of iPhone 5.

Foxconn, which is the trading name of Hon Hai Precision Industry, runs a network of factories in China which make products for several tech companies including Apple, Hewlett-Packard, and Dell.

Most of its workers are migrant laborers from China who recently journeyed home for the Chinese New Year holiday which began February 10 and lasted a week. According to Foxconn spokesperson Louis Woo, as many as 97 percent of its employees had returned to work, Reuters said.

The report added that a Foxconn recruitment center in Shenzhen was closed on Thursday.

Apple sold less-than-expected 47.8 million iPhones during the year-end holiday quarter of 2012, which fueled concerns its dominant market share was increasingly chewed away by rival handset makers running Google's Android operating system, according to the report.

Last month, Foxconn said it expected to face a net loss in the second half of 2012 due to weakening demand from its customers.