Chinese media Interface News was informed by employees from multiple departments at Xiaomi that they had just started a round of layoffs and that the compensation plan was N+2 (paid by the employer).
An employee at Xiaomi told an Interface News reporter that the layoff is quite large. He revealed that many departments, including the Internet department and mobile phone department, are involved in the layoffs. However, the intensity of the layoffs varies from one department to the next.
The percentage of layoffs in Xiaomi’s individual departments is as high as 75%. Furthermore, teams from the Internet department have fired 40% of their employees.
He said that the HR wing was better off in this case and many laid-off workers were satisfied with the N+2 compensation plan. Unused annual leaves were also converted into double wages. Some employees even felt that the compensation plan was better than the year-end bonus. Employees with three years of experience said N+2 was more than seven months of their usual salaries.
It is unclear how strong this round of layoffs will be. However, it is possible that it could reach 15% of Xiaomi’s total workforce. According to its financial report, Xiaomi Group had 35,314 full-time employees as of September this year, with 32,609 of them located in China.
Xiaomi is yet to respond to this news.
The unstoppable growth of Xiaomi’s auto manufacturing business is an indication that its core business is in trouble. The macro-level effects of high global inflation and economic crises in emerging nations and geopolitics are more evident among developing countries. These countries are Xiaomi’s most advantageous overseas territories.
Honor and Xiaomi have worked together to boost Xiaomi’s sales in China, but it still lags behind the top five brands there. Xiaomi also needs to address the inventory problem that was left from last year.
