Xiaomi and Its Investment Recipients ZMI and Black Shark Conduct Layoffs
Beijing-based tech giant Xiaomi has reportedly initiated a new round of layoffs, with the proportion of affected employees in some China-based departments as high as 75% and perhaps involving 6,000 staff members. Furthermore, two enterprises that have received major Xiaomi backing – gaming smartphone manufacturer Black Shark and smartphone accessory manufacturer ZMI – have also been exposed to extensive layoffs.
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Black Shark was founded in 2017 by Xiaomi, focusing on the R&D and manufacturing of gaming smartphones. At that time, it rode the rising tide of popular mobile games such as Honor of Kings and PUBG Mobile. The sales volume of its products once exceeded 1 million units, accounting for as much as 47% of the Chinese market. The company has also won financing from many investors.
However, with the shrinking of the gaming phone market, the sales volume of Black Shark phones dropped rapidly. Since then, it has been exploring the VR field. In January of this year, 36Kr reported that Tencent planned to acquire Black Shark. At that time, sources disclosed that after the acquisition, the gaming phone firm would be integrated into the Interactive Entertainment Group (IEG) led by Tencent‘s Chief Operating Officer Mark Ren. However, the acquisition finally ran aground, and Black Shark fell into a storm of layoffs, with a reported ratio of nearly 50%.
Recently, news emerged that personnel adjustments were conducted again at Black Shark. Some individuals certified as former employees of Black Shark posted on Chinese social media that some of the employees of Black Shark’s Shanghai division were laid off. On December 20, an individual familiar with the matter confirmed this to the Times Weekly, saying, “The company is laying off employees and the business is shrinking and being adjusted.”
On the other hand, the situation at ZMI seems to be more serious, and the company may no longer exist as an independent brand in the future. On December 18, it was reported that 80% of ZMI staff had been laid off. Except for the R&D department, all other departments saw layoffs, and a small number of specialists were transferred to Xiaomi‘s home appliance, smart wearable device and other departments.
ZMI issued a statement addressing the matter on December 23, saying that the brand will continue to exist and develop, and that online remarks claiming it will stop operations were fake news. The statement did not mention any details about layoffs, which may confirm that the company is indeed laying off employees.
ZMI was originally a private brand of Jiangsu Zimi Electronic Technology Co., Ltd., which works on the R&D of smart devices. Its sales volume for mobile power banks, chargers and other accessories is very high. In March 2021, Xiaomi announced that it would acquire 50.09% of ZMI’s shares at a price of $205 million. After the acquisition, ZMI became a wholly-owned subsidiary of Xiaomi.