Xiaomi India plans to reduce its workforce to under 1,000 employees, According to reports, due to organizational changes, a reduction in market share, and increased scrutiny from government agencies.
The Economic Times reported that Xiaomi India, which employed approximately 1,400 and 1,500 employees at the start of 2023, recently laid off around thirty employees and may do so again in the future.
The report citing a Xiaomi spokesperson states that the headcount decisions are based on the business outlook and that the “local Indian leadership has been empowered.” The report adds, “As with any company, we take headcount decisions based on the market’s state and business projections.” Xiaomi says the company continues to hire “when and where needed.”
The report makes the suggestion that imminent layoffs may not take place because the leadership team is currently under pressure to identify team members who are not performing up to expectations. Individual assessments of performance will be a deciding factor in the retention decision. The company’s declining market share has also been a source of concern for a variety of employees, who attribute it to internal organizational issues and the significant amount of power at the Chinese headquarters. Manu Kumar Jain, the global VP of Xiaomi, left the company earlier this year after nine years of being associated with tech companies.
Market Share Shift and Workforce Layoffs: Xiaomi India’s Challenges in 2022
According to Counterpoint data, Xiaomi India’s market share slipped from first to third in just two quarters. In the third quarter of 2022, which ended on September 30th, Xiaomi India had a market share of 21%, followed by Samsung (19%) and Vivo (14%). In contrast, Samsung took the lead in the next two quarters with a 20% share, followed by Vivo and Xiaomi with an 18% share. With a 20% share in the previous quarter, Samsung retained to hold the top spot, followed by Vivo (17%) and Xiaomi (16%). Analysts suggested that the drop could be due to the Redmi Note series’ falling popularity as more rivals like OnePlus and iQOO entered the smartphone segment.
In December 2022, Xiaomi also confirmed laying off 10 percent of its global workforce. The company said the layoffs were part of “routine personnel optimization and organizational streamlining,” and that impacted workers had been compensated in compliance with local regulations.
In order to align corporate objectives and ensure a strong market presence, good communication and collaboration between the Chinese parent company and the local Indian leadership will be vital.
It will be interesting to see how Xiaomi India responds to changes in the market and whether its strategic and reorganizational efforts can help the company regain its position and momentum in the Indian smartphone market.