The line to quit stretched the length of a football field.
More than a hundred Chinese workers who once assembled and tested Apple iPhones queued up on a recent morning outside Gate 7 of the vast Changshuo electronics factory to collect their severance and go on their way. They had once hoped that their assembly line jobs would give them big enough paychecks to propel them into a better life.
That was before consumers in China turned up their noses at Apple Inc.’s new iPhone XR and its nearly $1,000 price. Work slowed. Overtime evaporated. And now workers are giving up.
“Usually we had 80 to 90 extra hours” per month, said Zhang Zhi, 25, who had worked two years at the factory but was now standing in the quitting line. Starting in late October, her supervisors started sending her home early and giving her two-day weekends, eating into her overtime. In December, her pay totalled about $370, roughly half what she had made in the busiest months.
Ms. Zhang found part-time work elsewhere that pays about $600 a month. Still, she said, “it’s better than staying here.”
China’s factories once made products for the rest of the world. These days, increasingly, Chinese factories make products for China as well. Its vast and still-emerging consumer class has opened up a hugely profitable market for global companies like Apple, Nike, Inc., General Motors Company and Volkswagen AG. Those companies in turn use Chinese factories to meet those needs.
Today, China’s consumers have grown more reluctant to spend, and many of the workers who depend on them have been hit. Lower demand for consumer goods has led to job losses and shrinking paychecks. That is worsening China’s economic slowdown, which has posed a major challenge for Beijing and could put it at a disadvantage in the trade war with President Donald Trump.
China doesn’t disclose reliable employment data, but signs of slowing factory work abound. Car and chemical factories are moving at a slower pace. China’s Lunar New Year holiday begins next week, but some companies were sending home workers as early as December.
Huojiancun isn’t the only place where weak iPhone sales are leaving an impact.
In the city of Zhengzhou, employment at a vast factory that makes iPhones has fallen to about 70,000 from the already low pre-Lunar New Year level of more than 100,000 a year ago, according to China Labor Watch, which tracks working conditions and speaks to workers in China.
In a statement, the Zhengzhou factory’s owner, the Taiwanese electronics supplier Foxconn, declined to comment directly on the group’s figures but said it was constantly reviewing its operations and planned to add more than 50,000 positions across China in the first three months of the year.
An Apple spokeswoman, Wei Gu, pointed to the company’s previous statements and declined to comment further.
Huojiancun is a rough industrial community on the edge of glittering Shanghai. Snack shops, calling card stalls and other small businesses catering to factory workers pervade the narrow streets and alleys surrounding the Changshuo plant.
Workers there may make the iPhone, but they can’t afford it. Even when their pay was at its peak, those assembly line workers would have needed more than a month’s wages to buy a base-level iPhone XR. Still, jobs there for years were in high demand because they tended to pay more and offer better working conditions than elsewhere.
Today, the situation is more complicated. Chinese workers are increasingly difficult to lure because they don’t want to work so many hours on an assembly line. Chinese companies are increasingly exploring automation as labor costs rise.
Supervisors kept workers from taking too many breaks and would dock their pay for infractions like littering, said Hou Fu’an, a Changshuo worker who had quit and was heading back home in the interior province of Henan. As workers began to leave over missing hours, he said, many remaining workers started getting overtime again, fattening their paychecks but adding to the workload.
“Inside the factory, workers are tightly controlled,” Mr. Hou said. “If one person does not do well, everyone in the group will be yelled at by the group leader. But they did not yell much when there were not many workers left.”
The Changshuo plant is owned by Pegatron Corporation, a Taiwanese contract assembler. Its shares have lost nearly a quarter of their value since the summer as the trade war with the United States mounted and as skepticism grew about the appeal of Apple’s latest iPhone models, which were released in September.
A Pegatron spokeswoman, Ming-Chun Tsai, declined to comment on the Apple business.
Every year, before Apple’s usual September launches of its latest iPhones, the Changshuo factory adds temporary workers to accommodate the rush. It offers bonuses that can vary from $400 to $1,300 depending on demand, workers said. Qualified workers must be between 18 and 45 years old, be able to recognize the English alphabet and sport no visible tattoos, they said.
Many workers then typically leave before the Lunar New Year holiday, when they generally qualify for their bonus. But workers and local businesses alike said more workers than usual were leaving this year.
Huang Qionghuang owns a stall that sells bras that won’t set off metal detectors, an essential undergarment in a factory that scans workers coming and going to make sure they aren’t stealing or smuggling in cameras to take photos of the latest iPhone. In the past, October was her busy season. But sales slumped in recent months, and she dares not buy more bras to stock. The ones that did sell were the cheap ones, costing roughly $2.50.
“Last January, I earned more than my rent,” Ms. Huang said. “Now I can’t even make enough to pay the rent,” which she added was about $500 a month.
“This is the worst year since I came here three years ago,” she said.
Pegatron holds an outsize presence in Huojiancun. Online, it says the plant employs 70,000. Neon signs hanging among the warren of stalls next door call them the “Pegatron night market.” During busy seasons, according to local merchants, the streets and alleys are so crowded it can be difficult to move around.
More recently, merchants said, the Pegatron night market has grown quieter.
“There are fewer workers in the factory,” said Xu Aihua, who opened a local restaurant with his mother eight years ago. Looking up from the chicken soup he was making, Mr. Xu pointed to the nearly empty street out front. “See? There’s nobody.”
That could mean tough times for him and his mother. Their rent costs about $1,500 per month. A year ago, his daily revenue totaled about $150. In recent months, he has earned about half that.
At the line to quit at Gate 7, Wang Xiaofeng stood in the cold waiting for a severance that he hoped would total about $150. A year ago, his work hours were relatively steady. But this December, his overtime dwindled.
“I had three or four days without work in a week,” he said. “How much was I going to earn?”
Wang said he had found a new job, one that gave him more hours to pad his paycheck.
“I made the right decision,” he said. “I do not regret it.”