Xiaomi has begun laying off employees across several divisions of its smartphone and internet services business, cutting its workforce by about 15 percent, the South China Morning Post reported on Tuesday. A Hong Kong newspaper cited social media posts by affected employees and local Chinese media, saying that China’s social media platforms including Weibo, Xiaohongshu and Maimai have been inundated with reports of job cuts.
As of September 30, Xiaomi had 35,314 employees. informedwith more than 32,000 people in mainland China, and the latest move could affect thousands of workers, many of whom had just joined the company during a hiring process that began last December.
The company did not immediately respond to an email from Reuters asking for comment.
Xiaomi in November informed a 9.7% drop in third-quarter revenue due to China’s COVID-19 restrictions and lower consumer demand. Revenue from smartphones, which account for roughly 60% of total sales, fell 11% year-over-year, Xiaomi said.
Consumer consumption in China remains weak as cities across the country continue to impose restrictions to prevent the spread of the Omicron variant.
The electronics sector, in turn, has been hit hard. Smartphone shipments in the third quarter fell 11% in China and 9% globally, according to research firm Canalys.
In 2021, Xiaomi’s sales soared after it grabbed market share from competitor Huawei, whose ability to source components was crippled by US sanctions.
However, the rise was short-lived. In May, Xiaomi reported its first quarterly revenue decline since listing in 2018. In August, second-quarter revenue fell 20% year-on-year.
Xiaomi’s share price has fallen by almost 50 percent since the beginning of the year.
The company, in turn, was looking for new areas for growth. The company officially announced its foray into electric vehicles last year, with a commitment to start mass production in the first half of 2024.
© Thomson Reuters 2022