Xiaomi lays off 900 employees as revenues decline amid slowing Chinese economy: report

Chinese smartphone major Xiaomi has reportedly laid off over 900 employees, trimming close to 3% workforce. The company posted a second consecutive yearly decline in quarterly earnings during the April-June period, a steeper fall than the previous quarter’s revenue figure. Xiaomi posted its first-ever quarterly revenue decline on record in the first quarter amid a slowing Chinese economy.

Xiaomi lays off 900 employees as revenues decline amid slowing Chinese economy: report

China’s largest smartphone maker on Friday reported that its second-quarter net profit fell 83% from the year-ago period due to weaker smartphone revenue, attributing the lull to global macroeconomic turbulence and the resurgence of Covid-19. The Chinese electronics manufacturer’s net profit during the quarter declined to 1.39 billion Yuan ($204.80 million) from 8.7 billion Yuan in the same quarter last year.

The company, yet to confirm the report in South China Morning Post, declared a second consecutive earnings decline in the second quarter as sales fell 20% year-on-year to 70.17 billion Yuan or $10.31 billion.

“In the Chinese market, there was the resurgence of the pandemic, so as a result, demand was difficult and weak,” said Xiaomi president Wang Xiang on an earnings call.

China’s economy slowed down unexpectedly in July as the world’s second largest economy struggles to emerge from the downturn which began in the previous quarter amid an unrelenting zero-Covid policy.

The Chinese smartphone maker also faces regulatory and tax issues in one of its biggest markets: India.

The Indian government is looking into alleged tax evasion by Chinese smartphone manufacturers such as Oppo Mobiles, Vivo India and Xiaomi, and notices have already been served on them, finance minister Nirmala Sitharaman said.

The Department of Revenue Intelligence (DRI) has issued a notice to mobile company Oppo for total customs duty of Rs 4,389 crore on grounds of misleading declaration of certain goods leading to a short payment in customs duty. “

Duty evasion we think is about Rs 2,981 crore,” the FM added. “Undervaluation of imported goods for the purpose of payment of customs duty, that we think is an evasion of Rs 1,408 crore,” she said.

“Three show-cause notices have been issued to them and the approximate duty liability there is about Rs 653 crore. For the three show cause notices, they have been issued, they have deposited only Rs 46 lakh,” Sitharaman informed the Upper House of the Indian Parliament earlier.

Leave a Reply

Your email address will not be published. Required fields are marked *