A report has revealed Xiaomi layoffs in which more than 900 employees have been shown the door.
Xiaomi has reportedly fired more than 900 employees. Xiaomi layoffs make up nearly 3 percent of its workforce amid the economic slowdown, according to a report by the South China Morning Post. However, there is no official information provided by Xiaomi on the same. Xiaomi also posted a steep drop in its second quarter revenue as the world’s biggest smartphone market shrank, as it was hit by strict Covid-19 restrictions.
According to a report by Reuters, Xiaomi sales fell 20 percent year-on-year to 70.17 billion yuan ($10.31 billion), missing estimates and marking a steeper decline from the previous quarter when the company posted its first revenue drop since listing. The smartphone maker’s net income fell 67 percent to 2.08 billion yuan, missing analysts estimates.
“In the Chinese market, there was the resurgence of the pandemic, so as a result, demand was difficult and weak,” said Xiaomi president Wang Xiang on an earnings call. Rising fuel prices, input costs, and inflation affected overseas sales as well, Wang added. Net profit fell as a result of pressure to clear inventory via sales and promotions.
In 2021, Xiaomi saw a sales surge after it grabbed market share from rival Huawei Technologies Co Ltd. The company’s stock price has tumbled nearly 40 percent since the start of 2022, hit by the slowing Chinese economy and weakening overseas growth.
China’s consumer consumption has struggled to rebound from the impact of lockdowns in Shanghai and other cities in the first half of 2022. Data shows that the world’s second largest economy slowed unexpectedly in July as it struggled to shake off the June quarter’s hit to growth from Covid restrictions, prompting a central bank rate cut.
In India, Xiaomi’s strongest market outside of China, the company has been subject to government probes for allegedly evading tax.