The Chinese smartphone manufacturer, Xiaomi has reportedly laid off over 900 employees.
The effects of lockdowns in Shanghai and other cities during the first half of 2022 have made it difficult for China’s consumer consumption to recover.
The exact reason behind the layoffs is assumed to be because of the revenue drop. The largest smartphone market in the world as a result of stringent COVID regulations, the company reported a sharp decline in second-quarter revenue.
According to the reports, Xiaomi has fired nearly 3 percent of its workforce due to economic downtime. As per the same report, Xiaomi couldn’t achieve the quarterly target, dropping by nearly 20 percent in the June quarter.
Although the company has not yet confirmed the layoffs. Xiaomi’s sales fell 20% year on year to 70.17 billion yuan ($10.31 billion). Market experts estimate that the smartphone maker’s net income fell 67% to 2.08 billion yuan.
During an earnings call with analysts after reporting the quarterly earnings, Xiaomi president Wang Xiang said, “In this quarter, our industry faced many challenges, including rising global inflation, foreign exchange fluctuations (and) complex political environment.”
“These challenges significantly impacted overall market demand and our financial results for the period,” Wang Xiang added.
Due to pressure to use sales and promotions to move inventory, net profit decreased. The company’s headquarters is in Beijing.
As of June 30, Xiaomi had 32,869 full-time employees. Out of which 30,110 were based in mainland China. The remaining number of employees are located in India and Indonesia. The company had 14,700 employees in its research and development vertical.
Several Big Tech companies, unicorns, and startups have laid off employees amid the global macro-economic conditions. In July and August, many multinational companies including many big companies like Microsoft, Tesla, Robinhood, and Ola started layoffs.
On the other hand earlier, the leading companies Microsoft and Google also announced for hiring freeze due to the economic slowdown.
