Kunshan, China’s main electronics manufacturing hub in Jiangsu province, has initiated a shift in strategy that could further accelerate the electronic industry’s growth in the area but may cost thousands of workers their jobs in the process.
The county has started replacing some of its workforce with robots in an attempt to reduce labor costs, according to South China Morning Post.
Foxconn, Apple’s main supplier, recently fired 60,000 of its employees and replaced them with mechanical workers. The electronic parts company is among the 35 Taiwan companies which spent 4 billion yuan ($610 million) on artificial intelligence research and development last year alone.
Kunshan’s publicity department head Xu Yulian believes that more companies are planning to automate their workforce in the near future. As many as 600 major companies in the industrial hub have expressed their plans to do so in a government survey.
“The Foxconn factory has reduced its employee strength from 110,000 to 50,000, thanks to the introduction of robots. It has tasted success in reduction of labor costs,” said Xu Yulian.
“More companies are likely to follow suit.”
About 4,800 Taiwanese companies are currently located in Kunshan, accounting for over 60 per cent of its GDP. If plans push through, thousands in the county, which has a population of more than 2.5 million people, are set to lose their jobs .