Manufacturing giant Foxconn has frozen hiring at a Shenzhen plant and put the brakes on recruiting for other factories across China.
Foxconn, which runs a network of factories across the world's No. 2 economy that make products for tech companies from the likes of Apple, HP and Dell, sought to pour cold water on reports it had imposed a hiring freeze while it slows production of Apple's latest smartphone.
"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," the company said in a statement.
"This action is not related to any single customer and any speculation to the contrary is false and inaccurate."
Like other Chinese contract manufacturers, Foxconn relies on a large number of migrant labourers from across the country, who journey home for the most important holiday of the year. Many do not make it back to work, but Foxconn spokesman Louis Woo said this year they saw as many as 97 percent of employees return.
Apple sold a less-than-expected 47.8 million iPhones in the 2012 holiday quarter, fanning fears that its dominance of consumer electronics is on the decline as Samsung and other manufacturers that use Google's Android software gradually gain market share.
The iPhone is Apple's most important product, accounting for half its revenue. The company's shares slipped almost 2 percent yesterday to $US451, and are down about 34 percent from their September peak above $US700, as investors fret about sliding margins and intensifying competition.
Foxconn's latest statement contradicts another Foxconn spokesman, Liu Kun, who is cited as saying, "Currently, none of the plants in mainland China have hiring plans."
Foxconn's recruitment website showed the company's Taiyuan and Hangzhou plants were hiring. But its factory complex in the southern city of Shenzhen is its single largest production base.
The Shenzhen plant "is not hiring at the moment because workers' return rate after Chinese New Year is very high this year, reaching 97 pct", Woo said.
"We replenish each year depending on the return rate."