A major Apple supplier in China, which provides advanced touch-screen components and cameras to the company, has reportedly laid off more than 8,000 of its employees.
O-Film Group removed the bulk of its workforce on one of its manufacturing plants in China, a move that has been seen by some as a clear result of the already year-long trade dispute between China and the United States.
According to local media reports, the people that were removed from their jobs were those that were working at the company's factory in Nanchang in the Jiangxi province.
Due to the gloomy market outlook and fierce competition brought about the geopolitical turmoil, O-Film hasn't really had a great year. The company reportedly lost a lot of its profits, leading to its decision to cut operational costs.
O-Film released its first-half earnings Tuesday night, revealed worse-than-expected figures including a 91 percent fall in net profits. The company only managed to earn around $3 million for the first half of the year with a slight increase in its revenues.
Earlier in the year, major investment banks such as Morgan Stanley and Credit Suisse cut their target prices for the firm after it reported disappointing 2018 results.
A number of the company's investors are reportedly already trying to cut their losses by clearing their exposure in O-Film. A Guangzhou-based joint-stock bank has reportedly announced plans to exit its investments in the company, which are mostly in the form of bonds.
Market analysts have explained that the problems O-Films is facing are not only limited to the company. The entire electronics industry in China is apparently also facing great pressure due to the economic slowdown and the drawn-out trade dispute with the United States. Other business sectors in the country are also experiencing the same pressures as the trade war continues.
China's Purchasing Manager's Index, a measure of the country's manufacturing activity, shrank for the third straight month in July. Domestic shipments of mobile phones also dipped by 5.1 percent year-on-year for the first half of 2019. Meanwhile, global shipments fell by 3.8 percent.
The Chinese government launched a study in mid-July, with the help of state-owned think tanks, to assess the economic health of domestic economies.
Officials from the Ministry of Commerce visited various provinces around the country to see how their respective economies would fare if the trade dispute continues. So far, the agencies have reportedly been having a difficult time gauging the impact of the trade war on the economies, but they are trying to come up with measures to ease the effects.
