According to SCMP, Chinese smartphone manufacturer, Xiaomi 小米 laid off more than 900 staff on August 20. Xiaomi posted a sharp drop in second-quarter revenue amid an economic downturn hit by the stringent Zero-COVID policy.

According to the report, the company’s sales dropped 20% year-on-year to $10.3 billion, missing analysts’ estimates and indicating a steeper fall from the first quarter.

Net income in the June quarter also missed estimates, falling 83.5% to $205 million from $1.2 billion a year earlier.

The outlet noted that Xiaomi 小米 shed more than 900 jobs to 32,869 employees from a total of 33,793 employees in the first quarter.

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

He added that soaring fuel prices, input costs, and inflation also impacted overseas revenues. In addition, net profit declined due to sales and promotions to clear stock.

In addition, Xiaomi’s 小米 smartphone revenues, which generate more than 50% of total income, declined 28.5% to $6.2 billion from $8.7 billion.

The Beijing-based firm saw a 26.2% drop in smartphone shipments, mainly caused by global economic headwinds and the resurgence of COVID-19.

Reuters reported that Xiaomi’s 小米 stock price had dropped almost 40% since the beginning of this year.

In April, Indian tax regulators fined the company $725 million in assets for allegedly avoiding tax. Xiaomi 小米 was found guilty of illegally transferring funds overseas under the guise of royalty fees.

Additionally, AP reported that in 2021, the U.S. Department of Defense blacklisted Xiaomi 小米 and eight other Chinese firms for alleged military ties.

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