Foxconn confirms cost cuts, believes trade war to be settled

The company refutes the rumor of “huge cost cuts“

Foxconn Technology Group, the world’s largest contract electronics manufacturer, confirmed a plan of cost cuts for 2019, while the expenditure on research and development will not be targeted.

A Bloomberg report revealed that the Taipei-based company is expecting a tough year for 2019, and is set to cut NT$90 billion (US$2.9 billion) in costs, as well as lay off around 10 percent of non-technical employees to address the challenges.

On Nov. 23, the company dismissed the report of “huge cost cuts” as a rumor in a statement, describing the reviews and cuts as a routine practice aimed to promote organizational transformations and upgrades.

The company explained that the business units which fail sales targets, as well as investment projects that continue to incur losses, will be subject to the plan.

The company added that the expenditure reviews for next year will include hundreds of its subsidiaries, with a focus on administrative and logistics expenses. The statement didn’t mention the amount of cuts.

The expenses on R&D, however, will not be affected in the plan, as it is the foundation to strengthen competitiveness, said the company.

Also in the statement, the company expressed optimism that the US-China trade dispute will eventually reach a mutually satisfactory solution.