Xiaomi Cuts Staff Amid China Economic Slowdown

Popular Chinese smartphone maker Xiaomi has begun a round of layoffs amidst lower revenues and a sagging domestic economy according to local media.

The job cuts affect several units of its smartpohone and internet services business, reported Jiemian, an online publication associated with Shanghai United Media Group.

The affected staff were given redundancy packages, Jiemian said, adding that the cuts would lower Xiaomi’s payroll by about 15 percent.

Following a hiring spree last December Xiaomi has instituted other staff cuts this year, with the current round of cuts potentially affecting thousands of staff.

‘Personnel streamlining’

The company had 35,314 employees as of 30 September, according to its third-quarter financial results, with 32,000 in mainland China.

A Xiaomi representative told the Hong Kong-based South China Morning Post on Tuesday that the firm has implemented “routine personnel optimisation and organisational streamlining” that would affect “less than 10 per cent of the total workforce”, or up to about 3,500 people.

The paper said social media outlets such as Weibo, Xiaohongshu and Maimai had been flooded with anxious posts about the reported cuts.

Economic slowdown

As with many Chinese tech firms, Xiaomi’s sales have been affected by ongoing lockdowns under China’s strict zero-Covid policy, which it began dismantling earlier this month.

The company, which had a 13 percent share of the Chinese market in the quarter ending 30 September, saw a revenue decline of 9.7 percent year on year to 70.47 billion yuan (£8.29m) for that quarter, with net profits dropping by 59.1 percent to 2.21bn yuan.

Global smartphone shipments fell 9 percent year on year to 297.8 million units in the third quarter, with shipments in CHina down 11 percent to 70 million units, according to Canalys.