The company had 14,700 employees in its research and development vertical in the same time-frame…reports Asian Lite News
Chinese smartphone giant Xiaomi has slashed more than 900 jobs amid the ongoing economic meltdown as its revenues dropped nearly 20 per cent in the June quarter (Q2), the media reported on Saturday.
According to the South China Morning Post, the layoffs affected nearly 3 per cent of Xiaomi’s workforce.
As of June 30, 2022, the company had 32,869 full-time employees, 30,110 of whom were based in mainland China, primarily at its headquarters in Beijing, with the rest primarily based in India and Indonesia.
The company had 14,700 employees in its research and development vertical in the same time-frame.
“In this quarter, our industry faced many challenges, including rising global inflation, foreign exchange fluctuations (and) complex political environment,” said Xiaomi president Wang Xiang during a call with analysts after reporting its quarterly earnings on Friday.
“These challenges significantly impacted overall market demand and our financial results for the period,” said Xiang.
Revenue from the smartphone segment slumped 28.5 per cent, from 59.1 billion yuan in the second quarter last year to 42.3 billion yuan this year, “primarily due to the decreased sales of our smartphones”.
“In the second quarter of 2022, global macroeconomic turbulence and the resurgence of Covid-19 continued to impact overall market demand for smartphones,” said Xiaomi.
Global smartphone industry shipments declined 8.9 per cent year-over-year and 7.7 per cent quarter-over-quarter, and mainland China industry shipments declined 10.1 per cent year-over-year and 10.9 per cent quarter-over-quarter, according to Canalys.
Earlier, Chinese conglomerate Tencent fired 5,500 employees, after posting a revenue of $19.8 billion in the June quarter, down 3 per cent which is the first decline since going public.
Meanwhile, Chinese smartphone maker Xiaomi on Friday said the ongoing investigations and allegations in India could take a long period of time to settle, and the company could receive judgments or enter into “settlements that may adversely affect its operating results or cash flows”.
The company, which registered around 20 per cent drop in its global sales at $10.31 billion in the June quarter (Q2), said that “it is not practical to quantify” related financial effects (of India probes) “at this stage”.
“The management assessed the aforesaid matters related to Xiaomi India, taking into consideration opinions from professional advisors and concluded Xiaomi India has valid grounds to respond to the relevant Indian authorities,” the group said in its quarterly financial statement.
In April, the Enforcement Directorate (ED) had said they seized Rs 5,551.27 crore of Xiaomi India, lying in the bank accounts under the provisions of Foreign Exchange Management Act, in connection with the illegal outward remittances made by the company.
Finance Minister Nirmala Sitharaman had informed the Rajya Sabha, in the recent Monsoon session, that five cases of customs duty evasion have been registered against Xiaomi India by the Directorate of Revenue Intelligence (DRI).
The company said in its quarterly results that since December 2021, Xiaomi India has been involved in various investigations and notifications initiated by relevant Indian authorities including the Income Tax Department, the Directorate of Revenue Intelligence and the Directorate of Enforcement “in relation to compliance of relevant income tax regulations, custom duties regulations as well as foreign exchange regulations”.
Several Big Tech companies, unicorns and startups have laid off employees amid the global macro-economic conditions.