Xiaomi’s business is not looking good, and it is the employees of the firm who will pay the price. Reuters has just announced that the Chinese manufacturer had begun to lay off many employees of its telephony and online services divisions.
The company joins a growing list of Chinese firms that have chosen to split their operational costs to deal with the health crisis.
Indeed, the Covid epidemic is far from over, and many factories are still idling in an attempt to stem its spread. Major players like Tencent or the Alibaba group are in the same situation.
Thousands of jobs affected
A company spokesperson said the practices “optimization of personnel and rationalization of the organization” would affect “less than 10% of payroll”. He added that the workers concerned had received compensation in accordance with legal provisions.
Based on the figures of South Morning China Post, Reuters recalls that on September 30 the firm had 35,314 employees, including 32,000 in mainland China. This decision could therefore affect several thousand people. The majority of those concerned would be newcomers who joined the company during a major hiring phase, in December 2021.
The phenomenon could also worsen if the brand does not raise the bar. Xiaomi indeed recorded a 9.7% drop in its turnover in the third quarter, in particular due to health restrictions, but also a general drop in demand. This even reached 11% (compared to last year) for the telephony branch, which still represents 60% of the firm’s total sales.