About 60,000 Chinese employees of Foxconn Technology in Jiangsu Province lost their jobs because they were replaced by robots. It happened in just one factory of the Apple supplier.
The job losses is just initial because another 600 factories in the industrial zone of Kunshan plan to cut payroll costs and speed up production by replacing employees with robots. With the move, Foxconn’s manpower is down to 50,000 from 110,000, said Xu Yulian, an employee of the Kunshan government’s publicity department, reported The South China Morning Post.
The Taiwanese firms, 35 of them including Foxconn, are recovering the 4-billion-yuan investment on artificial intelligence (AI) the companies made in 2015. However, in the end, it may be the Kunshan local economy which would suffer with the shift to AI since two-thirds of its estimated population of 2.5 million, as of 2014, are migrant workers.
Unemployed migrant workers could resort to crime or leave the place and affect businesses dependent on the migrants.
The companies did not mind the higher upfront cost to the shift to AI because the robots are viewed as more predictable and stable on the long-term compared to workers. The ethical issues linked with causing unemployment rates to go up could possibly be justified by the tight deadlines these tech giants face to assemble high-tech gadgets shipped globally, reported Marketwatch.
With robots for employees, Foxconn would have less manpower problems such as the rash of suicides in their factory a few years ago due to complaints of overwork, poor accommodation and low pay.
It is not just in China but other countries where jobs are on the line since more than 30,000 robots, with a combined value of $1.8 billion, were ordered from companies in North America in 2015, according to the Robotic Industries Association.