Xiaomi Slashes 15 Percent of Jobs in Smartphone and Internet Services Business: Report

Xiaomi has started laying off workers in several units of its smartphone and internet services business, reducing its workforce by about 15 percent, the South China Morning Post reported on Tuesday. The Hong Kong newspaper cited social media posts by affected employees and local Chinese media, saying China's social media platforms, including Weibo, Xiaohongshu and Maimai, have been flooded with posts about the job cuts.

Xiaomi had 35,314 staff as of September 30, the paper reported, with over 32,000 in mainland China, and the latest move could affect thousands of workers, many of whom have just joined the company during a hiring spree that began in December last year.

The company did not immediately respond to a Reuters' email seeking comment.

Xiaomi in November reported a 9.7 percent fall in third-quarter revenue, hit by China's COVID-19 restrictions and softening consumer demand. Revenue from smartphones, which make up roughly 60 percent of its total sales, fell 11 percent year-on-year, Xiaomi said.

China's consumer consumption has remained weak as cities across the country continue to implement lockdowns to prevent the spread of the Omicron variant.

The electronics sector has taken a large hit in turn. Shipments of smartphones in the third quarter fell 11 percent in China and 9 percent globally, research firm Canalys has said.

In 2021, Xiaomi saw a sales surge after it grabbed market share from rival Huawei, whose ability to procure components has been hit by US sanctions.

Yet the boost was short-lived. In May, Xiaomi reported its first-ever quarterly revenue decline since its listing in 2018. In August, revenue for the second quarter fell 20 percent year-on-year.

Xiaomi's stock price has tumbled nearly 50 percent since the beginning of the year.

The company has in turn looked to new areas for growth. Last year, it formally announced a foray into electric vehicles, committing to entering mass production in the first half of 2024.

© Thomson Reuters 2022