In a bid to accelerate growth and reduce labor costs, Apple supplier Foxconn cut 60,000 jobs at a single factory, work that is now being completed by robots. As many as 600 companies in the Chinese manufacturing hub of Kunshan may have similar plans to automate their workforce, according to a government survey.
Foxconn spokesperson Xu Yulian told the South China Morning Post, “The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labor costs.” He added, “More companies are likely to follow suit.”
In order to change over from human workers to robots, where possible, Foxconn and other Taiwanese companies in Kunshan spent 4 billion yuan ($610 million US) on artificial intelligence in 2015. The job cuts represent a significant portion of the population of Kunshan, which has 2.4 million people, two-thirds of whom are migrant workers in the local factories according to a 2014 survey.
Worldwide sales of industrial robots more than doubled from 2004-2014. Industrial production numbers for China as a whole have declined over the last five years, from 15% of the national economy in 2011 to 6% in 2016.