Due to sluggish sales volume, Xiaomi would lay off 15% of its staff

Xiaomi, a China-based smartphone manufacturer, has begun laying off people in multiple areas, according to social media postings by impacted employees and local Chinese media sources. As per the reports, Chinese smartphone and internet services business has started laying off staff across numerous areas, cutting its headcount by around 15%. Those who were let go were offered severance compensation. This move is apparently because to reduced sales induced by China's Covid-19 lockdowns and poor consumer spending. [caption id="" align="aligncenter" width="650"] Image credit- The Economic Times[/caption] China's social media sites, including Weibo, Xiaohongshu, and Maimai had been flooded with messages on the job layoffs, citing social media posts from impacted personnel and local Chinese media. SCMP's research reveals that as of Sept. 30, Xiaomi employed 35,314 workers, with over 32,000 in mainland China. The current decision may effect thousands of employees, many of whom have just recently joined the firm following a hiring boom that started in December of last year. Layoffs in China are typically rationalized as "business efficiency" in order to dodge attention from labor regulations. China's labour legislation stipulates that any employment cutbacks that effect more than 20 persons be reported to the central government. In November, Xiaomi claimed that its revenue for the third quarter had declined by 9.7% due to the impact of COVID-19 restrictions, declining customer demand, and Chinese government constraints on the import and export of electronic items. Third-quarter revenues were 70.17 billion yuan ($9.81 billion), down from 78.063 billion yuan ($11.18 billion) in the same time a year earlier and well shy of the 70.52 billion yuan ($10.10 billion) projected by experts. [caption id="" align="aligncenter" width="1600"] Image credit - Mint[/caption] There was a 59.1% decline in net income throughout the time, from 5.176 billion yuan ($740 million) to 2.12 billion ($303 million). About 60% of Xiaomi's sales come from smartphones. Just days before this statement, Xiaomi founder Lei Jun presented the company's new flagship 13-series smartphones, which are powered by the Qualcomm Snapdragon chip, even though the consumer electronics market was weak due to the sinking Chinese economy. Based on statistics acquired by market research organisation Canalys, worldwide smartphone sales declined 9% year over year to 297.8 million handsets in the third quarter, with shipments in China down 11 percent to 70 million units at the same period.