Xiaomi starts laying off employees in smartphone, internet services business: Report

Xiaomi has reportedly joined the growing list of companies, including Meta, Google and Amazon that are laying off employees to reduce costs. The layoffs, attributed to the weak consumer spending, are reported to be in China only. The job cuts may reduce Xiaomi’s payroll by about 15%, the report notes.
Citing local reports and posts on social media platforms (Weibo, Xiaohongshu and Maimai) by some laid-off employees, a report in South China Morning Post says that the job cuts are being done in multiple departments, including several units of smartphone and internet services business.
As per Chinese media outlet Jiemian (via South China Morning Post), an online publication affiliated with Shanghai United Media Group, the laid-off workers were given redundancy packages. According to the company’s third-quarter financial results, Xiaomi had 35,314 employees as of September 30, with more than 32,000 in China.
Xiaomi says it implemented “Business optimisation”
The report notes that in China, lay-offs that affect more than 20 jobs must be referred to the government under China’s labour law. Hence, companies lay off employees in the name of “business optimisation” to avoid scrutiny by authorities.
The report also cited a Xiaomi representative as saying that on Tuesday (December 20), the company implemented “routine personnel optimisation and organisational streamlining” with “less than 10% of the total workforce” affected.

Slow consumer spending
Xiaomi reportedly started trimming down its workforce this year due to weaker sales as a result of Covid-19 lockdowns and slower consumer spending. Last month, Xiaomi reported a 9.7% fall in third-quarter (Q3 2022) revenue. Smartphone revenue, which constitutes about 60% of the company’s total sales, fell 11% on a year-over-year basis.
China recently eased its harsh “zero-COVID” restrictions even though the country is witnessing an increase in Covid cases. Foxconn, the company that assembles Apple‘s iPhones, also had to face the wrath of protesting workers at its Zhengzhou factory in central China after they demanded ease in restrictions and pay amid the virus outbreak at the workplace.