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Chinese New Year stokes COVID fears among Apple suppliers

“The companies want workers to stay put and not risk exposing themselves to infections, showing how worries over COVID-19 and labor shortages are plaguing a vital part of the tech supply chain.”

What you need to know

  • Apple suppliers in China are offering workers incentives to not travel home during the Lunar New Year.
  • It comes over fears that the travel could drive a surge in COVID-19 infections, causing labor shortages.
  • At least one manufacturer is also waiving dormitory fees.

Apple suppliers in China are trying to avoid a repeat of last year’s labor shortages by offering incentives to employees who don’t travel home for the Lunar New Year.

From Nikkei Asia:

A string of Apple’s most important suppliers in China are trying to quash fears of renewed coronavirus outbreaks by offering extra handouts to workers if they do not travel home for the upcoming Lunar New Year festivities.

The companies want workers to stay put and not risk exposing themselves to infections, showing how worries over COVID-19 and labor shortages are plaguing a vital part of the tech supply chain.

Pegatron, a major iPhone supplier, is offering production line workers a 4,000 yuan ($617) bonus if they stay at its factories across China for the Lunar New Year holiday, also known as the Spring Festival. The company will also waive dormitory fees between January and March.

The report further notes Luxshare Precision Industry, which has urged employees to spend the holiday at its factories with promises of rewards and entertainment:

“For the 2021 Spring Festival, we call on employees to spend the holidays where you are, and to spend the time with your colleagues at the company where it is safe. A different family, the same reunion. You will make yourself, family, friends, colleagues, the company and the country safe!”

As Nikkei Asia notes, the Lunar New Year “is the most important holiday of the year in China”, when many at home and abroad return to their home towns to see their families. The influx of workers to and from factories last year caused massive labor shortages, with many workers unable to return to work due to travel restrictions, delaying the iPhone 12 release.

This year, workers who return home have to test negative for COVID-19 and quarantine for 14 days, making it difficult to get workers back to work quickly. Local governments are rolling out PCR testing in some areas, such as Zhengzhou, home to Apple’s biggest iPhone plant run by Foxconn. The government has also reportedly encouraged companies to give their employees “red envelope” gifts as incentives to stay at work. The envelopes are traditional gifts during the period.

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