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New retail pressure behind Xiaomi's layoff

via:CnBeta     time:2020/3/29 2:01:15     readed:98

Chang Yuanyuan was an employee related to Xiaomi's offline business, and the contract with Xiaomi expired in February 2020. According to him, there are layoffs indicators in the company, so HR has persuaded him to resign since November 2019. He believes that this behavior is suspected of illegal layoffs, and he has not received compensation from Xiaomi in response to the media.

Li Yi (pseudonym), the former head of Xiaomi's Shanghai World Expo source store, is also dealing with the layoff dispute with Xiaomi when Changyuan tweeted that Xiaomi was suspected of illegal layoffs. What they have in common is that Li Yi and Chang Yuan are both employees related to the offline business of Xiaomi.

For the above layoffs, Xiaomi also gave a statement one by one, with each side holding its own. According to the analysis of the dismissed employees, behind these layoffs, it also reflects the reality that the operation mode of offline channels for millet is gradually mature, while the investment in Millet stores continues to increase, and the cost of offline channels is high. At this time, the old employees who are responsible for "exploring the way" in the early stage become the "victims" of the cost reduction of the company.

Xiaomi house, Oriental Pearl store

Compensation not yet in hand and invalid stock

According to xiaomi company to the reporter's response, changyuan was previously the shanghai company store manager, mainly responsible for the early selection of site selection, payment, operation during the operation of the guidance and evaluation of the score of the cooperative store business.

"The employment contract signed by the employee and the company has expired on February 29, 2020. According to the employee performance evaluation and relevant national laws, the company has issued a notice of non renewal of the contract on November 20, 2019, and given relevant compensation according to the labor law. There is no violent layoff." Xiaomi said.

In the eyes of most netizens concerned about the matter, the contract expired and has been compensated, Xiaomi's practice is legal and compliant. Chang Yuan himself never denied the expiration of the contract, but he believed that the events known to the outside world were one-sided.

Changyuan, who joined Xiaomi in early 2017, was initially the manager of Zhejiang specialty store (Xiaomi home cooperative business joint operation project), mainly responsible for customer development, offline store opening, customer relationship maintenance, etc. in Zhejiang Province. In the second half of the same year, due to its outstanding performance, it began to take over some offline businesses in East China (Jiangsu, Anhui, Shanghai, Zhejiang and Fujian), and then its base location was transferred from Hangzhou to Shanghai.

until November 14,2019 all calm was broken. Before the end of the day, Chang Yuan was interviewed by the relevant HR "", and was immediately told that "the company to adjust the optimization ", suggested that he voluntarily quit. HR then communicated with him twice on 15 and 20 November.

Chang Yuan thinks that according to the labor law, Xiaomi can notify Xiaomi not to renew the contract one month before the contract expires, that is, at the end of January this year. "To put it bluntly, it's layoff." Chang Yuan said that HR didn't give reasons for its unqualified performance, and said that he hoped to leave before the end of November or December, because there are layoff indicators in the company, and HR and district leaders need to submit the layoff list to the headquarters.

Han Xiao, a lawyer from Beijing Kangda law firm, told reporters that the law does not stipulate whether the company should notify the employees 30 days in advance when the labor contract expires. The company only needs to notify the employees before the expiration, and the company is willing or unwilling to renew the labor contract. At the same time, Han Xiao also mentioned that if the employee leaves voluntarily within the contract period, the company can avoid paying the employee economic compensation, but whether the employee leaves voluntarily in advance is a personal choice, and the company has no right to demand.

However, for Chang Yuan's statement, Xiaomi gave another version in response to an interview with the international financial news. HR never asked the employee to leave as soon as possible. The contract expired on February 29, 2020. After business confirmation, the employee did not renew the contract. In November 2019, the employee issued a notice of non renewal of the labor contract. One month later, the employee issued an EMS notice. On February 3, 2020, the employee issued a supplementary resignation agreement. 11 days later, the employee issued an EMS resignation statement.

"As the employee returned the company's fixed assets only on March 7, the N 1 compensation will be paid on April 5, the next payday ," Xiaomi explained in response to a substantial move that has not yet employee.

From another technology company with a huge sales network working for many years and joining Xiaomi, Chang Yuan once saw the dawn of his career. When he was interviewed by HR, he had many tasks in hand. At present, all things are unexpected.

Therefore, during the period of suspension, Chang Yuan was also reflecting. Just a few months ago, he also received the stock benefits from Lei Junfa, the founder of Xiaomi. In July 2019, in order to celebrate Xiaomi group's entry into the top 500 of the world, Lei Jun announced that he had prepared a red envelope - 1000 shares per person - for 20538 employees and partners of the core outsourcing service team. According to Xiaomi's closing price on March 26, the total value of the shares is about HK $210 million, and the value of each employee's shares is about HK $10000.

Often far from the list of "red envelopes". It was awarded this "red envelope" on July 19, 2019, with a vesting period of one year, i.e. July 19, 2020. However, according to the regulations, employees still have to work on the day of vesting to obtain the corresponding shares. In other words, if an employee leaves before the vesting date, the granted shares will automatically expire.

Options that can't be cashed and resignation applications that have been handed over

Often far or not alone. He said that he learned from the company's executives that the Shanghai branch and Xiaomi house would cut 5% of their employees respectively. At present, this claim has not been confirmed.

However, since the second half of last year, Li Yi, the "old millet man" with a three digit job number, has stood on the opposite side of Xiaomi due to his resignation dispute.

On the afternoon of December 11,2019, as usual, Li Yi is dealing with the related business at the Shiboyuan store of Xiaomi House, its jurisdiction. However, on this day, xiaomi shanghai regional manager, HR and other people suddenly visited, and on the grounds that li yi employees on behalf of the card and work hours are not in the shop, asked to submit a separation application in the system on the same day, and gave the deadline for separation is january 31.

Li Yi does not agree with Xiaomi's "far fetched" reason for dismissal. According to the explanation given by Li Yi, he does not have absenteeism. As for the punch card, the store's business hours are 12 hours. Anything happened during the period as the store manager needs to be dealt with in a timely manner at any time. "Sometimes we need to have a meeting or go out to talk about customers in the evening, so we will leave the work of attendance to the clerk to be responsible." Li Yi also said that the time is not as long as one year.

As you can imagine, the communication between the two sides was not pleasant. It lasted from 2:00 pm to 10:30 pm. It was mentioned in the communication that Li Yi's millet option might not be realized. Since joining Xiaomi in 2011, Li Yi has been granted a certain proportion of Xiaomi's options in June 2014, but in the negotiation between the two parties, he was informed that: "if (the company) unilaterally terminates, there is no option."

After returning home that night, Li Yi found that he had been kicked out of Xiaomi's various work groups. The next day, he changed his options into cash and received the company's suspension investigation notice. 25 days later, Li Yi received an email indicating that his resignation application had been submitted. However, according to Li Yi, he had never submitted any application for resignation before.

Email feedback received by Li Yi

In response to this, Xiaomi said that this was an internal violation. The fact of punch in was clear. The company had retained relevant evidence and made internal mail notification. The human resources sent the labor termination notice to the head of the Expo source store by express delivery, and HR initiated the resignation system process on behalf of him. There was no unwitting situation.

However, in this case, Han Xiao said that if an employee violates the company's rules and regulations, the company should bear the burden of proof, and if the evidence is not good, the employee may face the risk of being found to have illegally terminated the labor contract. If the company does not have clear evidence to prove that the employee violates the company's system and submits the resignation application on behalf of the employee in violation of the employee's intention, the labor contract shall be terminated illegally.

At present, both Li Yi and Chang Yuan are trying to protect their rights through labor arbitration. At present, Li Yi is also looking for a new job. He has been engaged in offline sales of mobile phones for many years. It's not realistic for him to change the industry again, but the dispute with Xiaomi has affected him to find a new job in the industry. At the beginning of the year, Li Yi had an interview with another mobile phone manufacturer. The job and salary he was interviewing were lower than that of Xiaomi. During the interview, he expected to take the job, but he was finally rejected. The HR told him implicitly that he might not be able to continue working in this line in the future.

Xiaomi's offline channel pressure behind layoffs

The reporter noted that on March 10, 2020, on the pulse of the real name workplace social platform, the user named "Xiaomi employee" verified that "as far as I know, Xiaomi has dug up the wolf HR, and now he is on the last elimination system of wolf, involving all departments, and has to cut 10% of the people."

For the above statement, the reporter was informed when he asked Xiaomi for confirmation that "the company will carry out relevant assessment on employees according to business needs, but there has never been any policy to force all departments to open the last elimination and layoff 5% - 10%".

At present, Xiaomi in the adoption of what standards to the relevant departments to adopt personnel optimization, it is not known. However, whether Changyuan or Li Yi, before leaving is Xiaomi line business related staff. An employee who recently left Xiaomi said that according to what he learned, since November last year, a number of Xiaomi offline channel staff have been cut ," this or with Xiaomi offline channel pressure related. At present, the team has done the project very mature, according to the existing template, the old staff can be easily done, but if a group of young people can also be completed, may not do well as the old staff, but the cost of personnel has fallen.

Xiaomi, who started from the Internet, leaped to the top of China's mobile phone market share five years before his start-up. In 2014 and 2015, Xiaomi became the sales champion of China's smartphone market for two consecutive years. But Xiaomi suffered Waterloo in 2016, and its market share fell directly from the champion to the fifth. Later, Xiaomi realized the importance of offline, that is, from February 24 of this year, Xiaomi's home officially transformed into a new retail store from after-sales. As of December of that year, the number of Xiaomi's home stores exceeded 50.

In the next two years, Xiaomi's home expanded rapidly. In addition to its direct stores, Xiaomi gradually sank to a broader market through authorized stores. By the end of December 2017, the number of millet homes had reached 287; by the end of 2018, the number of millet homes directly operated by millet in mainland China had reached 586, doubling, and the authorized millet experience stores operated with partners had reached 1378.

In the past two years, Li Yi's work has changed. In July 2017, Xiaomi House opened its third shop in Shanghai, Shiboyuan, where Li Yi was transferred to work and promoted to store manager a year later.

Changyuan also has more and more tasks. "In 2017, I was responsible for opening 30 millet houses, and in 2018, the number jumped to 46. At the same time, I opened some other millet stores of different types."

According to relevant information, Xiaomi reorganized the sales and service department into China at the end of 2018; in June 2019, Lei Jun stressed in a mobilization meeting the strategy outline of Xiaomi China for the next three years, which included three years of investment in new retail construction of 5 billion yuan, the same month, Xiaomi set up the China District offline business committee.

From the sales performance, we can directly see that the overall environment is getting worse. Li Yi needs to complete a certain target flow every month. He said, "in 2017, when the store's performance is good, it can reach 6 million yuan every month. In 2018, it will basically maintain 5 million to 5.5 million yuan per month. In 2019, the company's task indicators will continue to drop. Last December, they dropped to 3 million yuan, and this January, they will further drop to 2 million yuan."

At the same time, Xiaomi store investment is still increasing, on December 28,2019, Xiaomi offline more than 100 stores opened at the same time, at that time official announced that the number of Xiaomi offline terminals has exceeded 6000.

Changyuan said that in 2019, the main focus of the development of millet offline stores is on authorized stores and other types of stores. There are not many new stores in Xiaomi's home, but in 2020, the route of Xiaomi's home has been redesigned to open 600 stores, including 100 new direct stores, 100 specialty stores, and 400 authorized millet stores have been transferred to Xiaomi's home.

this will require a large cost. According to Changyuan, the general authorized store needs hundreds of thousands to open, but the cost of Xiaomi House is at least 1 million, the selection of site selection, decoration, design, recruitment, training, marketing and a series of processes have not been able to do a month or two.

In addition to the high cost of opening stores, there has been a voice that the profit of millet is too low and the profit space of dealers has been squeezed. Sun Yanbiao said that the relationship between the channel and the mobile phone manufacturer is the interest. It depends on whether the manufacturer can bring enough interest space. Among the domestic manufacturers, Huawei has a high gross profit space and attracts more dealer channels.

According to Fu Liang, an independent IT Analyst, Xiaomi's offline and online channels still need to make up a lot of lessons. One of the typical problems is that its competitors oppo and vivo have a large margin space for the channel providers, and the partners of these manufacturers will get more benefits. Xiaomi mode itself is to make the best price performance ratio, and its premise is to reduce profits, which will cause pressure on the channel providers.

(at the request of interviewees, Chang Yuan and Li Yi are both pseudonyms)

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