Xiaomi, a China-based smartphone manufacturer, has begun laying off staff in several departments, according to social media postings by impacted employees and local Chinese media sources.
Another Layoff by a Huge Tech Firm
In a brief report by Reuters, the Chinese smartphone and internet services company has started laying off employees across many departments, decreasing its headcount by roughly 15%. Those who were let go were offered severance compensation.
This move is reportedly due to reduced sales caused by China's Covid-19 lockdowns and sluggish consumer spending.
China's social media platforms, including Weibo, Xiaohongshu, and Maimai had been bombarded with messages on the job layoffs, citing social media posts from impacted staff and local Chinese media.
However, Xiaomi has been unable to provide any information on the scope of the layoffs, said South China Morning Post (SCMP).
SCMP's report indicates that as of Sept. 30, Xiaomi employed 35,314 people, with over 32,000 in mainland China.
The recent decision may impact thousands of employees, many of whom have just recently joined the corporation following a recruiting boom that started in December of last year.
Layoffs in China are often justified as "business optimization" in order to evade attention from labor regulators.
China's labor legislation mandates that any employment cutbacks that affect more than 20 people be reported to the central government.
Unhealthy Revenue Status
In November, Xiaomi said that its revenue for the third quarter had dropped by 9.7% due to the impact of COVID-19 restrictions, declining customer demand, and Chinese government limitations on the import and export of electronic products.
Third-quarter sales were 70.17 billion yuan ($9.81 billion), down from 78.063 billion yuan ($11.18 billion) in the same period a year earlier and well shy of the 70.52 billion yuan ($10.10 billion) predicted by analysts.
There was a 59.1% drop in net income throughout the time, from 5.176 billion yuan ($740 million) to 2.12 billion ($303 million).
About 60% of Xiaomi's sales come from smartphones. Just days before this announcement, Xiaomi founder Lei Jun introduced the company's new flagship 13-series smartphones, which are powered by the Qualcomm Snapdragon processor, even though the consumer electronics industry was weak due to the slowing Chinese economy.
Based on data gathered by market research company Canalys, worldwide smartphone sales dropped 9% year over year to 297.8 million devices in the third quarter, with shipments in China down 11 percent to 70 million units at the same time.
Xiaomi vs. Apple
According to SMCP, Xiaomi has an ambitious aim of dethroning iPhone manufacturer Apple from the No. 1 rank worldwide by 2024.
In November, the Chinese tech firm was rumored to be debuting its own "iPhone." Days after, teasers for Xiaomi 13 were out, and reports said it could surpass the Apple iPhone 14 Pro Max in terms of battery life.
The introduction of the Xiaomi 13 Series has caused a stir in the smartphone market.
There are now two available versions in this series: the regular Xiaomi 13 and the Xiaomi 13 Pro. They have established a reputation not just for excellent specifications but also for unbeatable costs.
