By Greg Gao

Xiaomi, one of China’s biggest smartphone makers, has begun mass layoffs, slashing up to 15 percent of its workforce, according to reports by Chinese media outlets Jiemian and Reuters.

Xiaomi employees said that Xiaomi’s smartphone department, Internet services business department, China department, and other departments were involved, but the layoffs between departments were not the same. Among them, the proportion of layoffs in some departments in China is as high as 75%, and some teams in the Internet services business department also has a layoff of 40%.

Media outlet Jiemian said that affected employees take a so called N + 2 severance package based on length of employment.

However, the overall number of this round of layoffs is not yet clear, and it is estimated that it may reach 15% of the total workforce. It was previously reported that Xiaomi’s current round of layoffs is expected to reach 6,000. If estimated according to this figure, the layoff rate will be close to 20%.

A company spokesperson said on December 20 that its “personnel optimization and organizational streamlining” practice would “affect less than 10% of the total workforce”, adding that those affected have been compensated in compliance with local regulations, reported Reuters.

Xiaomi in November reported a 9.7% fall in third-quarter revenue, hit by China’s COVID-19 restrictions and softening consumer demand. Revenue from smartphones, which make up roughly 60% of its total sales, fell 11% year-on-year, Xiaomi said.

Wang Xiang, president of Xiaomi Group, said at the third-quarter financial report meeting that the US chip ban has no effect on Xiaomi, and the supply of chips is stable. But he also mentioned that cost reduction and efficiency increase are what Xiaomi has been doing since the beginning of this year. 

Xiaomi had 35,314 staff as of Sept. 30, according to the South China Morning Post, with over 32,000 in mainland China, and the latest move could affect thousands of workers, many of whom have just joined the company during a hiring spree that began in December last year.