As the world’s second-largest economy struggles with a severe unemployment issue, Xiaomi, one of the biggest smartphone manufacturers, has started making layoffs in China.
A short time after global tech behemoths like Meta and Twitter fired thousands of employees, a Chinese startup has decided to reduce its workforce.
Xiaomi Layoffs
A spokesman for the Beijing-based company said that it recently undertook regular organizational streamlining and personnel rationalization. The insider stated that less than 10% of the company’s employees are impacted by the action.
Xiaomi did not provide any additional information, but numerous Chinese official media sites have reported this week that the company would lay off thousands of employees in a variety of positions, including those in its smartphone and internet business groups.
Early in the year, the corporation already made considerable layoffs. According to its financial records, Xiaomi cut around 1,900 jobs in the first nine months of 2022. At the end of September, it employed about 35,000 people full-time, the majority of whom were based in China.
The third quarter of this year saw a nearly 10% decline in the company’s revenue from the same period last year, hit by restrictions on COVID-19 in China and a waning market for electronics worldwide. 60% of its revenue comes from smartphone sales, which saw an 11% decline.
The Chinese smartphone giant’s layoffs come as the nation is grappling with growing economic difficulties.
Small firms have been particularly heavily hurt by the nearly three years of strict pandemic restrictions that have disrupted factory and consumer activity.
The most current government numbers show that in November, the urban unemployment rate the broadest official gauge of jobs rose to 5.7%, the highest level in six months.
Young individuals have very poor employment prospects. In November, the unemployment rate for people between the ages of 16 and 24 was 17.1%; it was still below July’s record of 19.9%.
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More Tech Employees Are Losing Their jobs
Meanwhile, Alibaba lay off more than 15,000 people in the first nine months of this year, while Tencent laid off approximately 4,000 staff during the same time period.
The government has stated that preventing layoffs will be its top policy priority for the upcoming year, thus the layoffs could present a significant challenge.
In recent months, China has witnessed extraordinary protests. In November, various cities witnessed a rare display of public outrage against the country’s strict zero-Covid policy, which was quickly rescinded in early December.
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