On the afternoon of July 8th, as per the news, Xiaomi, which has experienced a decline in its revenue for several consecutive quarters, continues to vigorously promote cost reduction and efficiency enhancement to improve performance.
Xiaomi recently announced internally the establishment of a special group for cost reduction and efficiency enhancement, with the group’s Chief Financial Officer (CFO) Lin Shiwei as the team leader.
According to the information that has been provided, it has been reported that the special group which has been established with the purpose of cost reduction and efficiency improvement will be reporting to the Group Operation Management Committee.
The Group Operation Management Committee will be responsible for overseeing the operations of this special group. It has been further reported that the team leader for this special group will be none other than the Chief Financial Officer (CFO) of the Group, Lin Shiwei.
Additionally, the team members of this special group will comprise of the group CEO special assistants, namely, Pan Jiutang, Liu Wei, and Zhang Jianhui. Moreover, the Group Finance Vice President, Sun Qian, will be serving as the secretary-general of this special group. Xiaomi Group Operation Management Committee was established earlier this year in January, with the company’s CEO Lei Jun serving as the director of the Economic Management Committee, responsible for daily business management and other relevant matters.
Since 2022, the mobile phone market has been experiencing a slump, and mobile phone manufacturers, including Xiaomi, are facing tremendous performance pressure.
Xiaomi has witnessed five consecutive quarters of revenue decline and four consecutive quarters of net profit decline, from the first quarter of 2022 to the present.
At the beginning of this year, Xiaomi announced a new business strategy of “equal emphasis on scale and profit” to optimize its internal management structure, improve operational efficiency, optimize resource allocation, and reduce costs and enhance efficiency, which have become a crucial task.
According to sources, Lei Jun once said at an internal executive meeting,
“Now is the moment of life and death, and we must find the point of reducing costs and increasing efficiency.”
In the first quarter of this year, Xiaomi’s total revenue was 59.5 billion yuan (680.68 Billion Rupees), a year-on-year decrease of 18.9%.
However, the adjusted net profit reached 3.2 billion yuan (36.61 Billion INR), a year-on-year increase of 13.1%. Despite the fact that the revenue is still experiencing a decline, there is some positive news to report as the net profit has finally shown growth, which can be attributed to the implementation of cost reduction and efficiency enhancement measures, which have also yielded initial results.
Recently, Lei Jun suggested to the invested companies at an internal meeting of Shunwei Capital to
“keep an eye on cash, reduce costs, and increase efficiency”
and use this method to tide over the current economic cycle.
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