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Crisis at Xiaomi: Chinese cell phone manufacturer hit hard

Crisis at Xiaomi: Chinese cell phone manufacturer hit hard

After Xiaomi had actually only gone up in recent years, a huge setback is now following. Up to 10 percent of employees are to be laid off. The Chinese manufacturer’s important smartphone division is also likely to be affected.

Xiaomi is laying off thousands of employees

Ever since Xiaomi was founded in 2010, the Chinese company has seen steadily growing sales every year. In the meantime, it has worked its way up to become one of the world’s most important smartphone manufacturers. The company, spoiled by success, is now pulling the emergency brake and is separating from thousands of employeesas confirmed by Xiaomi itself (source: South China Morning Post).

Xiaomi currently has around 35,000 employees, and up to 10 percent are expected to leave the company. Xiaomi has not given an exact number, but speaks of “routine personnel optimization” and “rationalization for organizational reasons”. Personnel costs are to be reduced by 15 percent. There is a severance payment for affected employees. Some of them were only discontinued in December 2021.

In fact, Xiaomi is now selling fewer smartphones than before. In the third quarter of 2022, the company had to report a 9.7 percent drop in sales compared to the previous year Mobile phone sales fell by about 9 percent. A net loss of around 200 million euros was also reported in the last quarterly report. Xiaomi’s share price has fallen by more than a third since the beginning of the year, similar to other tech companies.

Maybe the Xiaomi 13 will turn things around:

Xiaomi: Fewer mobile phone sales in China

Especially in the home market, Xiaomi hasn’t been that strong lately. In China, Xiaomi has to have one Decrease of 11 percent to 70 million smartphones sold, as market researchers have calculated.

The Xiaomi 13 and 13 Pro were recently introduced, both of which are initially only available in China. A European release is expected soon.

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