Weak consumer spending presumably pushes Xiaomi to cut 15% of personnel
Xiaomi, the Chinese smartphone giant, which aims to oust Apple from its #1 spot by 2024 throughout the world, is now laying off various types of personnel, as social network reports from the local media and workers themselves testify.
There has been no comment from Xiaomi and the actual numbers aren’t known. Business optimization is usually cited as the reason for layoffs in China in order to avoid scrutiny by authorities. Any layoffs that impact over 20 jobs must be reported to the authorities according to the law. Several units in Xiaomi’s smartphone and internet services sector will lay off workers with redundancy packages in a move that may possibly decrease Xiaomi’s payroll by approximately 15%.
Initially the company had 35,314 employees in Q3 2022, (over 32,000 of them in mainland China).
Weaker sales that stemmed from China’s coronavirus lockdowns and slowing consumer spending. Thousands of workers, many of whom are recent hires from the December 2021 hiring spree, may be affected. Weibo, Xiaohongshu and Maimai, China’s three social networks have been overwhelmed with posts regarding the reported job cuts at Xiaomi, adding a new wave of anxiety to the future of China’s tech sector.
Xiaomi’s flagship 13-series smartphones with the Qualcomm Snapdragon were unveiled just days ago. Global shipments are down 9% YoY to 297.8 million units, and shipments in China dropping 11% to 11 million units.
Retail sales, a crucial indicator of consumer behavior in China, were down 5.9% YoY in November. Aside from cars, consumer goods dropped by 6.1%, which affected the lifting of lockdowns across China.
Xiaomi has a 13% share of the Chinese market in Q3 and is the fifth-largest smartphone manufacturer and vendor in China. Company revenue declined by 9.7% YoY in Q3, and net profits declined by 59.1%. Xiaomi’s shares, listed on the Hong Kong stock exchange, closed down 2.73% on Monday.