China's biggest smartphone maker Xiaomi on Tuesday said that the company is implementing organisational restructuring and personnel optimisation that will affect less than 10 per cent of its total workforce. Earlier reports claimed that Xiaomi may cut 15 per cent of its workforce amid Covid lockdowns in China and rough global macroeconomic conditions.
"Xiaomi recently implemented routine personnel optimisation and organisational streamlining, with affected parties totalling less than 10 per cent of total workforce," a company spokesperson told IANS.
Those affected have been "compensated in compliance with local regulations," the spokesperson added.
The South China Morning Post earlier reported that Xiaomi may lay off workers from multiple departments, as it aims to reduce 15 per cent of its workforce amid the rough global macroeconomic conditions and local Covid-19 lockdowns.
The report cited several social media posts by affected Xiaomi employees and local Chinese media reports.
Xiaomi had 35,314 employees as of September 30, with more than 32,000 in mainland China.
The news of the layoffs comes as Xiaomi's financial performance has been under pressure in 2022.
The Beijing-based tech giant started laying off workers this year amid weaker sales due to Covid-19 lockdowns in China and slower consumer spending.
Meanwhile, India saw 44.6 million smartphone shipments in the third quarter this year.
According to a report by market research firm Canalys, Xiaomi held onto the first place with 9.2 million units as the brand gained traction from July's online sales ahead of the festival season.
Xiaomi is the latest in a line of tech firms that are laying off employees. After the Covid pandemic, tech firms went on a hiring spree as they witnessed a massive rise in demand.
However, these companies are now coming off a period of outsized growth and are in a self-correction mode, according to analysts.
Macroeconomic factors such as the Ukraine-Russia war combined with high inflation, declining consumer demands, and recession threat have dampened their spirit. This also signals that more tech firms might tighten their belt and let go of more employees in the coming weeks.
(With inputs from IANS)