Smartphone maker Xiaomi to slash 10% of jobs amid China’s COVID battle

Smartphone maker Xiaomi to slash 10% of jobs amid China's COVID battle
Staff members stand near the company logo at a Xiaomi store in Shanghai, China November 1, 2021. Picture taken November 1, 2021. REUTERS/Aly Song

By Donny Kwok and Josh Ye in Hong Kong

(Reuters) – China’s Xiaomi Corp has started laying off workers in its smartphone and internet services business, joining a long list of Chinese tech firms cutting jobs as the country battles COVID-19 outbreaks.

A company spokesperson said on Tuesday that its “personnel optimzation and organizational streamlining” practice would “affect less than 10% of total workforce”, adding that those affected have been compensated in compliance with local regulations.

China’s social media platforms, including Weibo, Xiaohongshu and Maimai, have been flooded with posts about the job cuts this week. Chinese local media first reported on Monday that the job cut would affect 15% of Xiaomi’s payroll, citing unnamed sources.

Many big tech companies in China including Tencent Holdings and Alibaba Group have been laying off workers in recent months as China became mired in a prolonged battle with COVID-19 outbreaks.

Xiaomi had 35,314 staff as of Sept. 30, according to the South China Morning Post, with over 32,000 in mainland China, and the latest move could affect thousands of workers, many of whom have just joined the company during a hiring spree that began in December last year.

Xiaomi in November reported a 9.7% fall in third-quarter revenue, hit by China’s COVID-19 restrictions and softening consumer demand. Revenue from smartphones, which make up roughly 60% of its total sales, fell 11% year-on-year, Xiaomi said.