Apple supplier Foxconn replaces 60,000 humans with robots in China

Apple supplier says automation has freed up its employees for higher value-added roles, such as in R&D
The first wave of robots taking over human jobs is upon us.

Apple Inc. AAPL, -0.06%  supplier Foxconn Technology Co. 2354, +0.41% has replaced 60,000 human workers with robots in a single factory, according to a report in the South China Morning Post, initially published over the weekend.

This is part of a massive reduction in headcount across the entire Kunshan region in China’s Jiangsu province, in which many Taiwanese manufacturers base their Chinese operations.

In a statement to MarketWatch, Foxconn Technology Group confirmed that it has been automating its manufacturing facilities throughout China, including Kunshan, for “many years,” which it says has freed up its employees to focus on higher value-added elements of the manufacturing process, such as research and development, process control and quality control.

”Across all of our facilities today, we are applying robotics engineering and other innovative manufacturing technologies to replace repetitive tasks previously done by employees,” Foxconn said. “As our manufacturing processes and the products we produce become more technologically advanced, automation is playing an increasingly important role in our operations and we have plans to automate more of our manufacturing operations over the coming years.”

Roughly 600 companies in the Kunshan region are reportedly looking to reduce headcount with robots, as part of an effort to accelerate growth and reduce costs, according to the South China Morning Post, which cited data from the Kunshan government. Last year, 35 Taiwanese companies, including Foxconn, spent a total of 4 billion yuan ($610 million) on artificial intelligence as part of this initiative, according to the report.

While developing AI does present higher upfront costs, machines are seen as more predictable and stable over the long term versus humans, potentially leading to personnel cost savings over the long term. With such high pressures placed on these manufacturers, which assemble much of the world’s consumer technology products and are often under strict deadlines, it also alleviates some of the ethical issues that arise when working people too hard for too long to meet demand.


Foxconn has been criticized for years for inadequate working conditions, which led to a string of suicides at its manufacturing facilities a few years ago. Foxconn employees have complained of being overworked, sleeping in less-than-ideal dormitory conditions, and not being paid fairly, but the company has worked to improve conditions recently.
The trend of replacing humans with more efficient robots is not confined to China.

As of February, there were more than 260,000 robots working in U.S. factories, according to industry trade group Robotic Industries Association. A total of 31,464 robots, valued at a combined $1.8 billion, were ordered from North American companies in 2015, a 14% increase in units.

Amazon.com Inc. AMZN, -0.37% is one such U.S. company that has been increasingly employing robots, with thousands shuffling around and sorting items in its fulfillment centers. Auto manufacturers have used robots to assemble cars in the U.S. for years.

At the moment, robots are expected to be used for lower-paying jobs that require less sophisticated skills, such as product assembly. But they are increasingly targeting more sophisticated and social roles that require customer service skills.

SoftBank Group’s 9984, +2.02%  humanoid consumer robot Pepper was rolled out to several Chinese retail stores over the last year. This week, Pepper also got a job at Pizza Hut, with the pizza chain unleashing the robot at certain stores in Asia to take customer in-store orders.

More sophisticated robots are also being developed, though they may face a tougher road to acceptance, given the higher-paid human jobs they threaten.

A robot that could serve many of the same functions as an anesthesiologist, for example, was discontinued in the U.S. after one year due to poor sales. The light demand might be attributed to immense backlash from the American Society of Anesthesiologists, which supports human doctors.