Citing an internal company memo, Bloomberg reported Wednesday that Foxconn Technology Group plans to cut around $2.9 billion in expenses next year.
In a response to the publication, Foxconn said its review was similar to prior years and intended to make sure the organization is aligned with customer needs and potential economic challenges.
Nearly one-third of the cost reductions will come from the company’s iPhone business, according to the report. Bloomberg pointed out weak demand for iPhones led four Apple suppliers to cut their revenue estimates last week. Another 15 percent of the cuts will come from the company’s industrial internet subsidiary.
In Wisconsin, Foxconn is building a $10 billion LCD manufacturing campus in Mount Pleasant that will initially be focused on televisions and other displays. The company’s longer term plans in the state focus on the development of a range of products and industries in an AI 8K+5G ecosystem, a reference to artificial intelligence and the next generations of screen resolution and cellular technology.
Foxconn’s plans for Wisconsin initially called for the construction of a Generation 10.5 LCD plant to make large format screens. Those plans changed to a Gen 6 plant amid a global oversupply of larger screens. Foxconn executives say the change gives the company additional flexibility to adapt to changing markets, but the shift has also prompted critics to question if the project will live up to its hype.
For its part, Foxconn has repeatedly said it remains committed to investing $10 billion and creating 13,000 jobs in the state. The company is nearing completion of a 120,000-square-foot, multipurpose building on the Mount Pleasant campus and aerial images show the development of roadways taking place.
A Foxconn spokesman did not immediately respond to requests for comment on whether the cost cutting plans would impact the Wisconsin project.
Bloomberg reported that Foxconn “will conduct an in-depth review of managers with an annual compensation of more than $150,000.”
