Xiaomi may cut 10% of its workforce amid Covid lockdowns in China

Global technology brand 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.

Budget deficit hits record $1.1 trillion
 

Broad budget deficit hit a record so far this year, showing how damaging the now abandoned Covid Zero policy and the ongoing housing slump have been to the economy and to the government’s finances.  
 

The augmented fiscal deficit was 7.75 trillion yuan ($1.1 trn) in January to November, according to Bloomberg calculations. That was more than double the same period last year and larger than in 2020, when the economy was battered by the initial Covid outbreak and growth was the slowest in decades.
 

The worsening deficit underscores just how bad the economy was at the end of November, shortly before the government in Beijing effectively scrapped its strict policy of trying to contain Covid infections. 

The lockdowns, testing and quarantine rules that were key to the Covid Zero policy put a strain on consumer and business spending, pushing the economy close to contraction in the second quarter. A surge in infections this quarter has already caused a drop in retail sales in October and November. Bloomberg