Chinese smartphone giant Xiaomi’s ‘personnel optimisation’ to affect 10 per cent of its workforce amid weak consumer spending

Chinese smartphone giant Xiaomi, which has an ambitious goal of unseating iPhone maker Apple from the No 1 spot globally by 2024, has started laying off workers in multiple departments, according to social media posts by affected employees and local Chinese media reports.

In China, lay-offs are often conducted in the name of “business optimisation” to avoid scrutiny by labour authorities. Lay-offs affecting more than 20 jobs must be referred to the government under China’s labour law.

A Xiaomi representative said in a statement on Tuesday that the company has implemented “routine personnel optimisation and organisational streamlining” with “less than 10 per cent of the total workforce” affected.

Xiaomi had 35,314 employees as of September 30, with more than 32,000 in mainland China, according to its third-quarter financial results.

Xiaomi will cut jobs in several units of its smartphone and internet services business, according to a report by Chinese media outlet Jiemian, an online publication affiliated with Shanghai United Media Group. The report said laid-off workers were given redundancy packages, adding that the move may reduce Xiaomi’s payroll by about 15 per cent.

The Beijing-based company began trimming workers this year amid weaker sales due to China’s Covid-19 lockdowns and slower consumer spending. 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.