Xiaomi reported a 9.7% decline in third-quarter sales in November, blaming COVID-19 restrictions in China and waning consumer demand. According to a report in South China Morning Post on Tuesday, Xiaomi has begun terminating employees in a number of its internet and smartphone services business units, cutting its headcount by about 15%. The Hong Kong daily cited social media posts from affected workers and local Chinese media to claim that messages regarding the layoffs have deluged China’s social media platforms, like Weibo, Xiaohongshu, and Maimai.
As per the newspaper, Xiaomi had 35,314 employees as of September 30 with over 32,000 working in mainland China. The most recent decision could have an impact on thousands of employees, many of whom have only recently joined the company as a result of a hiring spree that started in December last year.
An email from Reuters seeking comment was not immediately answered by the company.
Xiaomi reported a 9.7% decline in third-quarter sales in November, blaming COVID-19 restrictions in China and waning consumer demand. According to Xiaomi, sales of smartphones, which account for about 60% of its overall sales, decreased by 11% from the previous year.
As localities all throughout China continue to impose lockdowns to stop the spread of an Omicron strain, consumer spending has remained low.
As result, the electronics industry has been severely impacted. According to research firm Canalys, smartphone shipments decreased by 9 percent globally and by 11% in China during the third quarter.
Xiaomi had a spike in sales in 2021 as a result of overtaking rival Huawei, whose abilities to get components had been hampered by US sanctions.
But the increase was only temporary. Since its offering in 2018, Xiaomi revealed its first-ever quarter revenue loss in May. Revenue for the second quarter decreased by 20% from the prior year in August.
Since the start of the year, Xiaomi’s stock value has decreased by almost 50%.
In response, the business has sought out new markets for expansion. It publicly declared an entry into the electric vehicle market last year and promised to start mass production in the first half of 2024.