What’s new: Xiaomi Corp. confirmed Tuesday that it’s reducing headcount and streamlining its business at year-end as the Chinese smartphone maker faces declining revenue amid weak consumer demand.
A person at Xiaomi said the company is letting go almost 10% of its employees, or as many as 3,500 people. The total is less than previous media reports that the company would cut 15% of its workforce
As of Sept. 30, Xiaomi had 35,314 full-time employees, among whom 32,609 were based in the Chinese mainland. In the third quarter, Xiaomi paid 4.3 billion yuan in employee compensation.
Another person at Xiaomi said all divisions will be affected, but some more than others and a few business segments will be closed.
The background: Xiaomi’s revenue fell almost 10% in the third quarter, the third consecutive quarterly drop, as it battled a slumping global smartphone market and weak consumer demand at home. Sales of mobile devices fell 11%, leading declines across business divisions encompassing smart electronics and internet services.
The Beijing-based company posted a surprise net loss of 1.5 billion yuan for the quarter through September. Electronics demand is cooling as shoppers respond to rising inflation and slowing economic growth.
Global smartphone shipments are at their lowest in years thanks to depressed demand. Global smartphone sales are set to decline 2.9% next year following a 12.2% slump in 2022, Jefferies predicted this month. Xiaomi’s unit sales will decrease this year and next before recovering slightly in 2024, Jefferies forecast.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (bob.simison@caixin.com)
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