A rumor appeared recently on Chinese career information platform Maimai that Midea Group, a home appliance enterprise, had begun mass internal layoffs. On May 19, Midea responded that this year, in view of the internal and external environment, the company has decided to shrink its non-core business in an orderly manner, suspending its non-operating investment.
At the firm’s 2021 stockholder meeting on May 20, Chairman and President Paul Fang noted that based on future judgment, Midea felt that it is necessary to make an adjustment at present. In terms of business facing consumers, the company decided to keep the household appliances unit, and give up the categories of mother and baby products and pet appliances. For business facing enterprises, it will only retain several divisions such as robots and industrial automation, building technology, new energy vehicle parts, and energy storage.
These two responses undoubtedly confirmed that Midea is indeed cutting employees. On May 21, a laid-off employee posted in an internal forum, lamenting the efforts they had made for Midea over the course of many years. This post drew a direct response from Paul Fang.
“The development of every enterprise will have its ups and downs. Facing the changes of the environment, Midea must shut down non-core businesses, optimize organizations, and curb investment costs. It is also very painful and hesitant for me and the management team of the company to make these decisions,” Fang stated.
Founded in 1968, Midea has 28 R&D centers and 34 major production bases around the world, and its products and services are accessed about 400 million users in more than 200 countries and regions around the world. By the end of 2020, Midea re-divided its main business into five segments: smart home, industrial technology, building technology, robot and automation, and digital innovation.
According to the firm’s annual report for 2021, the number of all employees in Midea is 165,800, and the number of employees at the headquarters is 2,351. Midea’s revenue in 2021 reached 341.233 billion yuan ($51 billion), a year-on-year increase of 20.06%, while the net profit was 29.015 billion yuan, a year-on-year increase of 5.49%.