Chinese smartphone brand Gionee fires half its factory workers amid financial woes

Gionee, the Chinese smartphone brand which ranks just behind Apple in handset sales in China, has cut its factory workforce by half amid financial woes triggered by an expensive marketing war with deep-pocketed rivals. 

The Shenzhen based company has begun laying off workers at its main manufacturing plant in Dongguan, Guangdong province, with only about half of the previous staff retained to continue normal operations of product lines, Gionee said in a statement on its official Weibo account on Monday night.

Gionee did not elaborate on the number of staff currently working at the Dongguan plant, but a separate statement obtained from Gionee on Tuesday said the plant spans 300 acres with a capacity of producing 100 million handsets annually.

Amid slower growth in smartphone sales in the world’s largest smartphone market, many second and third-tier players in the country, including Gionee and Meizu, are facing even fiercer competition from leading brands which are investing huge amounts in marketing to increase their share, triggering further consolidation among Chinese smartphone brands.

Smartphone sales in China are dominated by the top five brands – Huawei Technologies, Oppo, Vivo, Xiaomi and Apple – which held a combined 77 per cent share last year, up from 67 per cent in 2016, according to Counterpoint.