In a significant shift in its business structure, Xiaomi India has initiated a series of layoffs, aiming to bring its employee count below 1,000.
Starting the year with 1,400-1,500 employees, recent reports indicate that approximately 30 percent of the workforce may be affected.
The company, known for its smartphones, TVs, laptops, and tablets, has already laid off a portion of its staff, attributing the decision to declining market share and government scrutiny.
Reasons Unveiled: Declining Market Share and Regulatory Scrutiny Behind Xiaomi India’s Layoffs
According to media reports, the layoffs at Xiaomi India are a consequence of dwindling market share and increased scrutiny from government agencies, as conveyed by current and former employees.
Restructuring has reportedly led to a centralization of decision-making power within the Chinese parent company, Xiaomi, impacting the Indian unit.
Xiaomi India’s spokesperson, however, emphasizes that the Indian division has autonomous authority to determine its workforce based on business requirements.
The spokesperson further asserts that hiring will continue as necessary.
Challenges Amid Declining Market Share: Xiaomi India’s Shipment Drops Significantly
Counterpoint Research data reveals a considerable decline in Xiaomi India’s market performance.
The company, once dominant in the sub-Rs 10,000 smartphone segment, has experienced a record-breaking 44 percent shipment decrease.
In the first quarter of 2023 (January-March), shipments plummeted to 5 million compared to 70-80 million during the same period the previous year.
Xiaomi India, formerly the top smartphone brand for 20 consecutive quarters, has now slipped to the third position with a 16 percent market share, trailing behind Samsung and Vivo.
Financial Challenges and Regulatory Issues: Xiaomi India’s Assets Seized, Seeking Interim Relief
In addition to market challenges, Xiaomi India faces regulatory obstacles. The Enforcement Directorate (ED) has seized bank assets worth Rs 5,500 crore due to alleged improper fund transfers abroad.
Xiaomi’s legal team cites a cash crunch and has requested an interim order to access bank accounts for day-to-day expenses.
These financial and legal hurdles further contribute to the complexities faced by Xiaomi India.
