Xiaomi starts layoffs at the end of the year: compensation for N+2, involving multiple departments

Reporter | Wu Yangyu

On December 19, Jiemian News learned from employees in multiple departments of Xiaomi that Xiaomi has recently started a round of layoffs, and the compensation plan is N+2.

A Xiaomi employee reported to Jiemian News that the layoffs were relatively large. As far as he knows, the mobile phone department, the Internet department, the China department and other departments are involved, but the layoffs vary between departments. Among them, the proportion of layoffs in individual departments in China is as high as 75%, and the Internet Department also has a team layoff of 40%.

As for the specific rhetoric of layoffs, he said that HR communication is “easy to talk and loose.” Many laid-off employees are relatively satisfied with the N+2 compensation plan, and the unfinished annual leave is converted to double salary. Some employees believe that according to this year’s situation, the compensation plan may be better than the year-end bonus. Employees with three years of experience said after receiving N+2 that they “worked for 7 months more than normal.”

The overall strength of this round of layoffs has not yet been clarified, but it is estimated that it may reach 15%. It has been reported that Xiaomi plans to lay off workers on a large scale in order to reduce labor costs, and it is estimated that the number of layoffs in this round will reach 6,000. According to this figure, the layoff rate is close to 20%. The financial report shows that as of September 30, Xiaomi Group had a total of 35,314 full-time employees, of which 32,609 were located in mainland China.

In response to the above news, Xiaomi has yet to comment on the interface news.

Since the beginning of this year, Xiaomi’s adjusted profits in the first three quarters have been 2.86 billion yuan, 2.08 billion yuan, and 2.12 billion yuan, which is far from the 56 billion yuan in a single quarter in 2021, down 52.9%, 67.1%, and 59.1% year-on-year respectively. %. Behind this, in addition to the continuous year-on-year decline in single-quarter revenue, the investment in car manufacturing is also gradually increasing, reaching a total of 1.865 billion yuan.

Xiaomi’s car manufacturing is unstoppable, but the instability of the basic disk business is a signal that deserves more attention. At the macro level, issues such as global high inflation, economic crises in emerging countries, and geopolitics have a more pronounced impact on developing countries than developed countries, and the former happens to be an overseas battlefield where Xiaomi has more advantages. In China, under the joint efforts of Honor OV, even though the Mi 12S series drives the reputation of high-end series, Xiaomi’s sales are still hovering on the edge of the top five clubs. On this basis, Xiaomi also needs to solve the inventory problems left over from last year.

Before the basic market returns to growth, “cost reduction and efficiency increase” is one of the most urgent topics for Xiaomi to tackle. “Cost reduction and efficiency increase are what we have been doing since the beginning of this year.” Wang Xiang, president of Xiaomi Group, mentioned at the third-quarter financial report meeting, “We are now making further plans, how to improve our human efficiency, reduce our cost.”

“In order to improve the overall performance next year, we will continue to carry out the work of reducing costs and increasing efficiency.” Wang Xiang said.

Further reading:

Millet laid off staff to make way for car manufacturing years ago

“On the day of the launch of the new mobile phone, I received a notice of layoffs.” In the dramatic contrast, in the past week, topics such as #米米layoffs, #传米米is reducing staff, etc. have been on the workplace hot list many times.

The mobile phone department of fresh graduates has fallen

A Xiaomi employee posted on Maimai that the layoffs may involve 6,000 people. At the same time, some netizens initiated a topic survey with more than 9,000 people participating. Among the departments that were laid off, the mobile phone department was the hardest hit.

According to a Xiaomi employee, the figure of 6,000 is an exaggeration, and there are many people who participated in the online survey to join in the fun. But at the same time, the employee also said, “There are more than 1,000 people, and the mobile phone department is the hardest hit area, which is basically in line with the status quo.”

There are also netizens who noted Xiaomi employees posted on Maimai, saying that some departments have been disbanded, and Xiaomi Youpin has basically been “cut off.”

Judging from the feedback from netizens, Xiaomi’s layoff ratio is 20%, but not necessarily all employees with low performance, and some employees with A performance are also within the scope of layoffs. Among them, the focus of this layoff is fresh graduates, one-year employees, and some old employees, covering Xiaomi Beijing headquarters, Xiaomi Nanjing, Shenzhen, etc.

As for compensation, this year’s fresh graduates are basically still in the probationary period and have not yet become regulars. The compensation standard given by Xiaomi is n+1. The official employee compensation is n+2, and it is said that the extra 1 is a one-month year-end bonus.

Xiaomi’s layoffs are urgent and without warning. When Xiaomi held a new product launch conference on the evening of the 11th, some employees received notices of layoffs. On the 12th, the news of Xiaomi’s layoffs on Maimai was already on the hot list. Some Xiaomi employees said that they worked normally on Monday (12th), and were asked to work from home from Tuesday. They were notified of their layoffs that night and talked to HR on Wednesday. For employees who disagree with the compensation plan, the system automatically submits their resignation. Some netizens reported that they were threatened by HR, “The next three generations of rights defenders will not be able to enter Xiaomi.”

At the same time, Xiaomi is still proceeding with the school recruitment this year. Faced with the news of the layoffs, many netizens who have just received offers from Xiaomi on Maimai also asked for help. The main concern is that “it’s hard to be laid off if you don’t become a full-time employee after half a year, and you lose your status as a freshman.” Netizens reminded , School admissions need to be cautious when receiving offers from Xiaomi.

Mobile phone business continues to be under pressure

A 22-year-old Xiaomi school recruiting visual design employee said that he was laid off after working for less than half a year, and the reason given by the company was “declining profits.”

On May 19, Xiaomi announced its Q1 financial report for this year, showing that the group’s total revenue was 73.4 billion yuan, and its adjusted net profit was 2.9 billion yuan, a year-on-year decrease of 52.9%; the gross profit margin was 17.3%, a year-on-year decrease of 1.1%.

On August 19, Xiaomi’s Q2 financial report showed that the revenue was 70.7 billion yuan, and the adjusted net profit was 2.08 billion yuan, which was estimated at 1.99 billion yuan, a year-on-year decrease of 67.1%.

On November 24, Xiaomi’s Q3 financial report showed that revenue was 70.474 billion yuan, with a net loss of 1.5 billion yuan; the adjusted net profit was 2.117 billion yuan, a month-on-month increase of 1.7%, and a year-on-year decrease of 59.1%.

Since the beginning of this year, Xiaomi’s mobile phone business has been under pressure. In the first quarter, Xiaomi’s smartphone business revenue was 45.76 billion yuan, a year-on-year decrease of 11.1%. Xiaomi’s global smartphone market shipments fell below 40 million units to 38.5 million units, a year-on-year decline of 22.1%.

In the second quarter, the pressure continued. The revenue of the smartphone business was 42.3 billion yuan. The global smartphone shipments increased by 1.5% month-on-month, but fell by 28.5% year-on-year. This is the sector with the highest decline in revenue among the three main businesses. A year-on-year decrease of 26.2%, the average selling price (ASP) fell to 1081.7 yuan.

The third quarter is still not optimistic. The total revenue of Xiaomi’s smartphone business was 42.5 billion yuan, a year-on-year decrease of 11.1%; global shipments were 40.2 million units, compared with 43.9 million units in the same period last year, a year-on-year decrease of 8.4%. Shipments were about 9 million units, a year-on-year decrease of 17.9%. According to IDC data, in Q3 of 2022, China’s smartphone shipments were approximately 71.13 million units, a year-on-year decrease of 11.9%. Xiaomi’s mobile phone shipments were about 9 million units, a year-on-year decrease of 17.9%, and its market share was 12.7%, ranking fifth.

Everything makes way for cars

“There are great benefits and great difficulties.”

Xiaomi has always been jokingly called “Xiaomi Grocery Store” by rice fans. Relying on mobile phones + Mijia app + Xiaoai classmates, from TVs, air conditioners, refrigerators, bathrooms and other large items, to sockets, thermometers, and ballpoint pens, Xiaomi’s products have almost penetrated into the world. to all usage scenarios of all users. Who can not have a Xiaomi product? There are not a few users of Xiaomi’s “family bucket”.

“Mobile phones are still the foundation of Xiaomi, but smartphones have reached a bottleneck from research and development to the market.” It is unlikely to achieve breakthroughs in the mobile phone business in the short term.

Since the beginning of this year, the new products released by Xiaomi at three press conferences are basically smart hardware such as mobile phones, watches, bracelets, and routers. Only at Lei Jun’s annual speech on the evening of August 11 this year, a range hood and Washer dryer set.

“I’m afraid Lei Jun may not be able to tell you how many products Xiaomi has.” The above-mentioned Xiaomi employee said that as a technology company, innovation or death means investment, but for “grocery stores”, it is impossible for all products to be available. Restock frequently.

“There must be something to be willing to give. In addition to the general environmental factors of the decline in profits, the sharp increase in R&D investment, especially the increase in new business investment is an important factor.” The so-called new business naturally refers to Xiaomi’s car-making plan.

Car manufacturing is a heavy asset. In March 2021, Xiaomi announced its construction and promised to invest 100 billion yuan in 10 years, with an average annual investment of 10 billion yuan, and the initial investment will be 10 billion yuan. (Xiaomi will spend 100 billion to build a car? More than the sum of research and development expenses in the past ten years.) However, in the conference call to release the Q3 financial report on November 24, Wang Xiang, president of Xiaomi Group, revealed in an interview that the total amount of car manufacturing in the first three quarters The investment is 1.86 billion yuan.

Although there is still some time before the announcement of the Q4 financial report, it can be expected that Xiaomi’s investment in production this year is unlikely to exceed 10 billion yuan, which is far from the investment promised by Lei Jun.

In April this year, the Xiaomi Automobile Factory officially started construction. The first phase of the Xiaomi Automobile Factory has 4 factories and an annual output of 150,000 vehicles. June. Recently, when a blogger visited the factory, it showed that some of the factory buildings were still surrounded by scaffolding, and some of the factory buildings even showed that they had not yet been capped.

Lin Shiwei, vice president and CFO of Xiaomi Group, said that Xiaomi still plans to launch the Xiaomi Tram in the first half of 2024, and will continue to increase capital expenditure and employee investment. Currently, Xiaomi’s automotive R&D team has more than 1,800 people.

But not long ago, the power plant on the official account of the Shanghai Jiemian Finance Association released an exclusive news saying that the progress of the Xiaomi car project was delayed. The above-mentioned media quoted people familiar with the information as saying, “On the surface, it seems to be progressing smoothly, but the actual progress is much slower.” According to its introduction, Xiaomi’s slow progress is mainly due to internal process problems. For example: some of the things to be delivered in the definition are delayed due to various factors. “There is not much content that should be delivered, and now some points will be cut off because of the delivery process, and there will be even less.” The above-mentioned person familiar with the matter said.

“Even if it is a core business like smartphones, it should be let go, and then it will be picked up later.” Several Xiaomi employees told Xinzhi Business Observer that building cars is the top priority of Xiaomi next year. Everything will give way in order to meet the volume production promise on time.