In recent days, Xiaomi has carried out a layoff (mass resignation) on its staff. According to the company’s statement, mass layoffs represent less than 10% of the workforce. Until September, Xiaomi had 35,314 employees worldwide, of which 32,609 are located in China – data released in the financial result of the third quarter.
More than one of the biggest smartphone manufacturers in the world, Xiaomi is a technology giant. In its homeland, the brand sells practically everything: from rice cookers to robot vacuum cleaners. In recent years, Xiaomi has announced investments in robotics and electric cars – whose development may be delayed with this setback.
Reasons involve global scenario and domestic problems
Just like Amazon, Meta and one of the fired on Twitter, Xiaomi is suffering from the effects of the global economy. To list a few: slumping world tech sales, the war in Ukraine, and the continuing shortage of chips. The manufacturer is also starting to feel the effects of the Chinese Covid Zero policy.
As much as the restrictive measures have proven to be effective against Covid, it needs to be combined with a strong vaccination campaign – it was the strategy adopted by a large part of the countries and what helped to fill the 2022 World Cup stadiums. With both tactics, countries managed to resume the growth of their economies. However, China failed in this second step.
With approximately 50% of the population vaccinated, China continues to use the Covid Zero tactic, where a single case of the disease can close an entire city, including those with large electronics factories. At this point Xiaomi suffers like the American big techs.
No customers and no production after high growth
The smartphone drop in China dropped by 11% in the last quarter. To complicate matters, sales can be delayed because of recurring plant closures, causing the same trouble Apple must go through🇧🇷
Another similarity that Xiaomi has with technology companies is in the hiring boom during the “strongest” phase of the pandemic. Amazon, Meta and Xiaomi have experienced growth in recent years – with more people at home, the services and products of these companies were more in demand.
Unfortunately for companies, one hour this growth stopped: no one is going to change their smartphone or notebook with the economy recovering, companies resume face-to-face work and supply equipment and physical stores are welcoming customers again. In the case of Meta, Apple changed the privacy policies that impact social media ads.
Xiaomi increased hiring in December 2021. A year later, these new employees are fired. Most of the cuts are in the sectors of smartphones and internet services.
With information: South China Morning Post🇧🇷 cnet and The Guardian