Xiaomi India Undertakes Workforce Streamlining and Organizational Reconfiguration, Leading to Employee Termination: Report
Xiaomi India, the Chinese smartphone brand, is undergoing a significant organizational overhaul and facing challenges in the Indian market. In an effort to streamline operations and cope with a slump in stock market share, as well as increased scrutiny from government agencies, the company has been steadily reducing its workforce since the beginning of the year.
At the start of 2023, Xiaomi India employed around 1,400-1,500 people. However, in recent weeks, approximately 30 employees have been laid off, and it is expected that more layoffs will occur in the coming months, according to a report by ET (Economic Times). The decision to downsize the workforce is primarily attributed to the business restructuring, which has shifted decision-making authority to the Chinese parent company.
A spokesperson from Xiaomi India stated that headcount decisions are based on the market conditions and business projections. They emphasized that the local Indian leadership has been empowered, and the company continues to hire new employees as needed. However, another senior executive revealed that earlier this year, the leadership team was directed to assign certain members of their teams to a performance improvement plan (PIP), which ultimately made it easier to dismiss employees based on performance-related criteria.
The layoffs coincide with internal restructuring within the company. The Chinese parent company now holds greater control over decision-making processes, a change that some employees believe has contributed to the decline in Xiaomi India’s market share. In the first quarter of 2023, Xiaomi India’s smartphone shipments dropped to 5 million units, down from 7-8 million units the previous year. Consequently, the company slipped to the third position in the Indian market, trailing behind Samsung and Vivo, after enjoying the top spot for 20 consecutive quarters.
Overall, Xiaomi India is undergoing a period of transformation and cost-cutting measures due to its decreasing market share and mounting pressure from government agencies. The layoffs, along with internal restructuring, are part of the company’s efforts to adapt to the evolving business landscape and regain its competitive edge in the Indian smartphone market.