Home / Companies / News /  Riot-hit Wistron hired more than it could handle

Apple Inc.’s supplier in India quadrupled workers in about eight months, ramping up production just as the world’s most valuable company began direct online sales in the country. The only hitch: Wistron Corp.’s systems weren’t robust enough to handle the deluge.

The number of workers at the Taiwanese company, the first Apple supplier to produce iPhones in India, surged to about 9,000 in November from some 2,000 just before the pandemic, according to people with knowledge of the matter. Wistron hired the contractual workers from six manpower companies, the people said, asking not to be identified because the matter was private. A representative for Wistron declined to comment.

The rapid expansion stretched the company’s systems and sapped the bandwidth of its management team, one of the people said. Its employee access system soon foundered, leaving it with patchy attendance records, delaying wages and overtime pay. Wistron’s human resource team—comprising about three people—just couldn’t cope up with the workers’ grievances.

On 12 December, many workers—promised roughly 15,000 a month—rioted over unpaid salaries.

The violence brings into focus the geopolitical challenge Apple faces. It is already navigating trade tensions between the US and China, while reducing its dependence on the latter for producing its iPhones, iPads and Mac laptops. Now, it has to contend with a deteriorating relationship between India—a nation CEO Tim Cook said is “the place to be"—and China.

The strife also dents Prime Minister Narendra Modi’s attempt to lure overseas investors for his flagship Make in India project, especially firms looking to leave China.

The Union government has offered incentives to companies such as Wistron to set up plants in the country after border clashes earlier this year killed 20 Indian soldiers and an unknown number of Chinese troops.

Cupertino, California-based Apple started its online store in India, the world’s fastest growing smartphone market, on 23 September, offering its full range of products from iPhones to Mac computers.

Earlier in the year, about 50km northeast of Bengaluru, Wistron was on a hiring spree in the semi-urban area of Kolar. For the first time since the closure of India’s oldest gold mine in 2001—after 121 years of operation—Kolar district had become a magnet for workers from across India.

Local MLA K. Srinivasa Gowda said he managed to recommend jobs for as many as 300 people with the firm amid high demand for labour.

Just before the clashes, Wistron had 1,343 full-time employees and 8,483 contract workers, according to a report prepared by the Karnataka labour department’s Kolar circle office after the violence. The report also alleged that Wistron didn’t maintain attendance and salary records.

As the night shift crew finished on the morning of 12 December, workers streamed into the human resources department to ask for their salaries, according to a statement by the All India Central Council of Trade Unions (AICCTU). The workers were turned away. The violence started soon after, according to the AICCTU, which visited the area after the riots.

The labourers stormed Wistron’s facility, damaging property and looting thousands of iPhones and laptops, according to local media. About 150 people were arrested, the AICCTU said, adding that the company didn’t have a labour union. Wistron estimated damages at as much as $7.1 million and said it’s doing its best to resume operations.

Apple has said it is probing the incident and whether Wistron adhered to its labour practices. It sent staff and auditors to the site, in cooperation with the local police.

“Our team is onsite, working closely with the Wistron management team to better understand and resolve the situation," Paul Dupuis, chief executive officer of Randstad India, which provided workers to Wistron, said in an email.

Representatives for the Adecco Group and Quess Corp., staffing firms identified in the Kolar administration’s inspection report, said they were cooperating with the probe. Bloomberg couldn’t reach Creative Engineers Ltd, another staffing firm named in the inspection report.

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