Xiaomi to bring headcount below 1,000 as market share dwindles

Xiaomi India will reduce its workforce to less than 1,000 employees as part of organisational restructuring as it faces a declining market share and increased government scrutiny as per a media report. 

As per the report, Xiaomi India had earlier employed around 1,400-1,500 workforce in early 2023. The company has recently laid off around 30 employees and there is a possibility of more layoffs in the upcoming months. The rejig in the organisation is reported to be because of the declining market share of the company. 

Xiaomi's bank assets worth Rs 5,500 crore were seized by The Enforcement Directorate (ED) in April last year after a probe found that the company had made illegal remittances to foreign entities by passing them off as royalty payments. Xiaomi has legally challenged ED's actions. 

Dwindling Market Share 

According to independent analyst company Canlys, Xiaomi's market share for the first quarter of 2023 stood at 16 per cent, registering an annual decline of 52 per cent.

The shipments declined to 5 million from 7-8 million a year ago. It dropped to third position, behind Vivo and Samsung which have 18 per cent and 21 per cent of the total market share respectively. It was the top smartphone brand in India for 20 quarters prior to this.

The company had entered the Indian market in 2014, when domestic players Karbonn and Micromax were fighting for survival and Samsung mobiles were too costly for the common man.

It sold its budget devices to the young population, pricing them lower than its competitors. Later it also introduced sub-brands Redmi and Poco, leveraging the rise of e-commerce platforms, increased coverage of the internet and emergence of faster 4G connections. 

In January this year, its global Vice President and former head of Indian operations Manu Jain had resigned after serving for nine years.

According to data from CounterPoint Research, Xiaomi had become the largest smartphone brand in the country under Jain. It had a 21 per cent share in shipments in July-September 2022.