Leadership changes at Xiaomi. According to an article published by Bloomberg, the Chinese company’s president, Wang Xiang (pictured below), will step down on December 30. Wang will be replaced by Lu Weibing, who is currently the head of the Redmi brand. This was announced by Xiaomi CEO Lei Jun in a note shared with employees, and was confirmed by the Chinese company, according to Bloomberg. In addition, two co-founders of Xiaomi, Hong Feng and Wang Chuan, will also leave the current affairs of the manufacturer.
Wang Xiang, one of the vice presidents of Xiaomi has just taken the stage to launch the conference. Let’s go ! pic.twitter.com/Bug1kxo0jp
— The Journal of the Geek (@JournalDuGeek) May 22, 2018
In this letter, Lei Jun admits that Xiaomi is going through a difficult time. Faced with this situation, Xiaomi will improve its operational efficiency. “We will add investments in research and development and continue to push our strategy of manufacturing high-end products,” the CEO also reportedly said. On the other hand, it is not known whether the crisis currently experienced by Xiaomi affects its automotive projects. As a reminder, the brand aims to become a manufacturer of electric cars, and intends to invest several billion dollars to make this happen.
Smartphone sales plummet, Xiaomi tightens its belt
It should be noted that while it had resisted quite well at the start of the pandemic, Xiaomi is currently being caught up in the macroeconomic context, as well as by China’s zero-COVID policy (which was finally abandoned). According to the explanations of the Financial Time, for three consecutive quarters, Xiaomi has announced declines in revenues and profits. Moreover, it is possible that the fourth quarter will be worse than the previous ones for the manufacturer.
Currently, smartphone declines are plummeting. According to IDC estimates, worldwide smartphone shipments fell 9.7% in the third quarter. “Most of the decline came from emerging markets where lack of demand, rising costs and inflation impacted consumers with lower disposable incomes”said Nabila Popal, research director of IDC’s Worldwide Tracker team. “Orders from OEMs have been further reduced in a bid to deplete stocks. Although Chinese vendors continue to suffer the most, all vendors have been affected, including Samsung and Apple.”
In essence, the crisis mainly affects the segments of affordable smartphones and mid-range smartphones. And because of this, manufacturers such as Xiaomi may be more vulnerable than Apple, for example. Moreover, in the face of this situation, Xiaomi has already confirmed a staff reduction of 10%. Officially, the manufacturer has carried out a “routine personnel optimization and a rationalization of the organization”.
