The job cut is merely a continuation of bad news from Gionee. Just last week, Gionee released a statement on its official Weibo account that it has begun laying off almost half of its workers at its main manufacturing plant in Dongguan.
A Gionee employee quoted by NetEase said that “this situation has been dragging on for too long without a clear explanation from the company. Some employees lost their patience and have decided to quit, others are still waiting for the severance plan to come out.”
A company response claimed that yesterday (April 10), the headquarters has started conducting exit interviews with employees and has proposed compensation plans.
There were blatant signs of what was coming for Gionee. Amid other rumors that the smartphone manufacturer was having difficulty in paying some of its suppliers and advertising partners, in January, a court in Dongguan issued an order to freeze 41.4% shares held by Gionee’s chairman Liu Li Rong for two years after Liu’s gambling debts rumors.
Founded in 2002, Gionee was the sixth best-selling smartphone brand in China. But China’s increasingly competitive and overcrowded smartphone sector is filled with deep-pocketed rivals like Huawei and Xiaomi, which have left many second and third-tier brands including Gionee embroiled in financial troubles. And what’s more, Chinese smartphone sales are showing signs of slowing down for the first time since 2009, making it more challenging for top-selling brands in the country, let alone smaller brands.