Xiaomi’s Impending Layoffs and Compensation Strategy Spark Employee Complaints
Recently, an individual verified as a Xiaomi employee voiced concerns on Chinese social media platform about an impending large-scale layoff scheduled for February 29, 2024.
According to the anonymous “whisleblower”, the compensation has been set at “N+1” package, and employees have been informed without any room for negotiation. The employee expressed dismay that the company plans to execute the layoffs prior to the distribution of annual bonuses on March 5, thereby denying employees their rightful year-end rewards. The employee commented, “For a large corporation to resort to such petty tactics shows a total lack of social responsibility.”
Other Xiaomi employees responded to this post, confirming its authenticity. They had received notifications about the layoffs at the end of February and were offered N+1 compensation, a strategy that appears to be a crude method to dodge the issuance of annual bonuses.
On the topic of layoffs, a source within Xiaomi told Chinese media outlet Jiawei that “This is not a mass layoff. Every year, there’s always a certain degree of optimization, and this time is no different. The number of people affected should be relatively small.”
Towards the end of 2022, rumors circulated about similar layoffs at Xiaomi, too. The compensation scheme at that time was N+2, and the projected number of layoffs hovered around 6,000. Additionally, some recent graduates reported being laid off by Xiaomi during their probation period. Xiaomi employees disclosed that the layoffs spanned several departments, including the mobile, internet, and China departments, but the extent of the layoffs varied between departments. In some regions of China, the layoff rate in certain departments reached 75%, and some teams in the internet department saw a layoff rate of 40%.
In the third quarter of 2023, Xiaomi Group reported total revenues of RMB 70.9 billion and an adjusted net profit of RMB 6 billion. This included RMB 1.7 billion in costs associated with innovative ventures like smart electric vehicles.
SEE ALSO: Chairman of the China Securities Regulatory Commission Dismissed
