Xiaomi India may lay off some employees as the company plans to bring its headcount below 1,000. According to a report in The Economic Times, the Indian arm of the Chinese smartphone brand is reorganizing operations after its mobile market share in the country dropped in the last two financial quarters. The company also faces increased scrutiny from the government and a cash crunch, forcing it to downsize its workforce.
The company has already reduced its staffing levels over the past few weeks and is expected to continue its reorganization drive over the next few months. The reduction in staffing is primarily because of an internal restructuring and a decision to reassess business strategy amid declining sales and growing regulatory pressures. The Chinese parent company reportedly drives the reorganization, which makes more decisions in the country.
Employees at Xiaomi have claimed that the company has been giving too much decision-making power to the Chinese parent, which is the primary reason for the decline in its market share. This is especially true for the budget segment, where Xiaomi has lost significant market share to other Chinese brands such as Realme, Oppo, and Vivo.
The reorganization at Xiaomi will likely result in losing about 30 jobs in the country. The company could not retain its top talent this year, with several high-profile departures, including offline sales operations director Sunil Baby and chief business officer Raghu Reddy. In June 2021, Manu Kumar Jain, who led the India division, left for a new job at Amazon and was replaced by former Xiaomi Indonesia leader Alvin Tse as general manager and Muralikrishnan B as president of the India operation.
In its statement, Xiaomi said it is “constantly reviewing and improving our focus areas, processes, and organizational structure. To achieve this, we are adjusting our team size in India.” It added that the company will continue to hire talented individuals when needed. It also said that the company had encouraged the leadership team to designate certain members of their teams for a performance review, which could lead to them being terminated based on poor performance.
The company has allegedly laid off about 30 workers in the last few weeks, which may continue for the next few months. However, it needs to be made clear how many people will be able to keep their jobs in the long run, as the company might have to scale down its operations further if it has to stay afloat amidst regulatory pressures and an ED case. Earlier this month, the company had to ask an Indian court for permission to use its bank accounts for day-to-day expenses while fighting the ED case in court. The court has yet to respond to the request. Xiaomi has faced a cash crunch in India before. It faced a similar crisis in March when it was forced to shut down its e-commerce platform Mi Home in the country.
