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Last month, Xiaomi experienced its darkest moment, Xiaomi's company in India was fined by the Indian government with a new policy of 4.8 billion yuan, which is equivalent to 6 times the total profit of Xiaomi in India for 9 years, and also equivalent to half of the annual profit of Xiaomi Global Company.
If Xiaomi does not find a solution and gives the 4.8 billion to the Indian government, then it is equivalent to Xiaomi working hard for 9 years, just working for India, and India has become a veritable graveyard of foreign companies.
Although India has had many fines against foreign companies over the years, Xiaomi's penalty amount this time ranks first among all fines.
When he first entered the Indian market, Rebs was also cordially received by Indian Prime Minister Modi, but how ambitious and spirited he was at the beginning, how discouraged and sad he is now.
And now there is news that Xiaomi India has begun a large-scale layoff, is the layoff directly related to the 4.8 billion fine? Is the layoff a silent protest against a huge fine, or a helpless move? Where does Xiaomi go in the face of a 4.8 billion fine?
First, Xiaomi India lays off one-third of its workforce
1. Xiaomi India lays off 30 employees a week
Just at the end of last month, from the mouth of the Indian media, it was learned that Xiaomi's company in India has begun to lay off employees, and the degree of layoffs is also unprecedented in history, it is said that in the past week alone, Xiaomi India has laid off almost 30 employees, and according to people familiar with the matter, the total number of employees in Xiaomi India has now dropped from the highest size of about 1,500 to 1,000 people, but it seems that this is just the beginning. More redundancies are expected to follow.
As soon as this incident appeared, it quickly attracted the attention of the whole world, and everyone was waiting for Xiaomi to give a precise reason why to lay off so many employees.
Xiaomi India also gave its own official explanation, although there is no word mentioned related to the previous 4.8 billion fine, but from between the lines, Xiaomi India gave the original words: layoffs are only to adapt to the current market development and business adjustment, and the rationalization of employees is also a very normal thing.
Well, market development and business adjustment, seems to point directly to the Indian government's unreasonable, and the latter sentence is also very indirect to express Xiaomi's silent protest to the Indian government and full of anger, you know, Xiaomi has been proud to create hundreds of jobs for India, but now, Xiaomi no longer cares whether it can provide more jobs for India, because the Indian government chilled Xiaomi's heart.
2. The layoffs reveal the strategic adjustment of Xiaomi India
When I saw Modi's call to "produce in India", and Xiaomi, which took the initiative to enter the arms of India, was once favored in India, even the helmsman of Xiaomi, Lei Jun, had cordial exchanges with Indian Prime Minister Modi, but how warm it was then, how cold it is now, it seems that these nine years have been wrongly paid because of this 4.8 billion unwarranted fine.
Judging from today's layoffs, Xiaomi has also completed its strategic adjustment in the Indian market, from the previous completely expansionary strategy to a contraction strategy, and behind the contraction, there is only deep helplessness.
After all, this is not Xiaomi's independent wish, but in order to alleviate the current situation, I had no choice but to make this decision.
Second, behind the layoffs is to feel India's suppression of Chinese companies
1. Xiaomi was fined a huge amount of 4.8 billion
Let's first review the 4.8 billion fine, just on the 9th of last month, the Indian government proposed to freeze the fine of 4.8 billion yuan of Xiaomi in 2022 on the grounds that Xiaomi India violated the newly promulgated Foreign Exchange Management Law, and formally confiscated it.
Not only that, India also proposed to replace all the executives of Xiaomi India with Indians, this move has to admire the thick skin of the Indian government, I am afraid that it is unprecedented and has no future.
Why say so, Xiaomi has been in India for 9 years, the total revenue is only 4.8 billion yuan, for example, but in these 9 years, 7 factories have been built alone, tens of thousands of local workers in India have been recruited, and countless taxes have been paid, but the Indian government is so easy to operate, it seems that all 9 efforts of Xiaomi in India have been collected into the national treasury.
You think about it, the factories built by Xiaomi are all on Indian land, Xiaomi can't take it away if it wants to, the workers recruited by Xiaomi are Indians, you can't evacuate if you want to, even the money earned by Xiaomi must be "handed over", feelings to recruit millet to India, that is, to work illegally, the whole one eats dry and wipes clean, not even a single bone is left.
2. India has previously imposed huge fines on Chinese companies such as Xiaomi and OPPO
But this is not the first time India has done this, but before Xiaomi, no Chinese company would be fined such a large amount.
In 2022, India will give OPPO an crime because of not using the exemption from tariffs correctly, that is, in the entire process of importing mobile phone parts, tax evasion and evasion, so OPPO is required to hand over the unpaid 3.7 billion yuan.
OPPO's one-milk compatriot VIVO is not much better, because VIVO is required to provide 800 million yuan as a capital guarantee, so without consulting VIVO, all 120 bank accounts registered by it are directly frozen, and if you want to unfreeze, you have to pay a deposit.
In terms of means and attitude towards Chinese enterprises, India can be said to be a resolute and strong execution.
3. Compared with Samsung, it is much more stable than Chinese enterprises
But on the other hand, Samsung, which is also an Asian company, seems to have developed smoothly over the years, and none of the tricks used on Chinese companies have been used in South Korean companies, and even if they have been fined to Samsung, but in the end Samsung can announce some way to cancel the fine.
4. India has a "good reputation" as a cemetery for foreign companies
India has been chaotic because of the domestic tax system and management system, resulting in countless taxes paid in this sector, and another department shouts about tax evasion, in short, India's tax department is like a big marmot's hole, can not be filled.
Therefore, in so many years, many big international companies have left the market angrily because they can't stand India's strange tax and government management system, so there were once more than 5,000 foreign companies in India, and now only more than 2,000 remain.
India has become the world's most deserved graveyard for foreign companies, and no country has ever subjected companies to unnecessary penalties so many times.
Xiaomi is aware of the huge risks in India
1. India and other millets began to harvest after completing the factory layout
But Xiaomi, it seems that a giant ship has been built in India, how to drive, how to turn the rudder, it is difficult to get to the sky.
Before Xiaomi entered the Indian market, it was looking at the same rich demographic dividend as China, and if it could win the Indian market, it would definitely be the icing on the cake for Xiaomi's own revenue.
Therefore, in the 6 years from 2015 to 2021, Xiaomi has been wholeheartedly laying on the construction of Indian factories, and Xiaomi is also full of sincerity, not only providing a large number of jobs, but also providing a large number of technical support, and when Xiaomi is diligent and tirelessly to completely clean up this piece of rivers and mountains, the Indian government shows its true face.
The speed of this change of face, it is not difficult not to suspect that the Indian government has laid out a big picture from the beginning, so many years of planning, seems to be waiting for this day to come, and since it wants to harvest, it is necessary to harvest thoroughly, including asking Xiaomi to replace Indian executives, it seems that Xiaomi India has really become an Indian local company.
In the past, Xiaomi, when making announcements, will look forward to the development in India, but this time, when talking about the reasons for the layoffs, there is not a word to mention how it will develop in the future, it is easy to see from here that Xiaomi has been heartbroken by India, and just before this happened, Xiaomi still has the idea of continuing to invest in India, and even wants to build another wireless headphone production line, and other product lines are also actively in preparation.
But it seems that these full sincerity will eventually run aground because of the greed of the Indian government, and we don't know whether India will get their ideal return because of the current unreasonable behavior.
2. India prides itself on being in an advantageous position in the global wooing
And why India dares to risk the world's condemnation and completely disregard all face, is to dare to do such a thing that completely harms others and self-interest, which is very closely related to India's current international environment.
Because of its world's largest population, although the gap between the rich and the poor is large, the rich are rich and rival countries, but the poor are so poor that they can't even eat, and India's hungry population is also famous internationally.
But this does not prevent India from being favored by the world's economic powers, it seems that all developed countries in recent years are wooing India, like the recent news, Apple is ready to transfer part of its production capacity from China to India, ending the history of no Apple stores in India; And Tesla CEO Musk, who went back from China and turned around and went to India.
Not only these giant enterprises attach importance to India, the political leaders of various major countries are also hot with India, India seems to have tasted the benefits of the demographic dividend, just the United States' support for India can be said to have been blatant, so although the whole world can see that the Indian government fined Xiaomi 4.8 billion, which is a very abnormal thing, but everyone closed their mouths very tacitly, and no one came forward to say a fair word for Xiaomi.
Therefore, let the Indian government be more unscrupulous, just like the sentence sung in Eason Chan's song: what you can't get is always in turmoil, and those who are favored have no fear, India can be said to have lost its way in everyone's "concern", and it is not easy to say whether India in the future will also be treated in the same way by these big countries.
3. Xiaomi is still in a dilemma
And what about Xiaomi? Where is the way to break the game? It seems that the most effective means at present is to stop the loss in time, such as this layoff, but too many layoffs are just a drop in the bucket, just silent resistance to the Indian government, and the real big heads, such as factories and production capacity, are still firmly in the hands of the Indian government.
And for Xiaomi, aside from the sky-high fines, India is still a very attractive market, after all, there are few companies that can occupy 30% of the whole India, and Xiaomi can do this is really valuable.
So now it can be seen that Xiaomi does not seem to tear its face with the Indian government, but discusses equally and amicably whether it can give a more satisfactory solution to this incident.
Therefore, it seems that a better strategy is to fight and retreat, shrink the scale, pack up, and prepare to go home, so that you can recover as much loss as possible, and it is more secure.
Because in front of the Indian government, even if the scale is as large as millet, it is still small like an ant in the palm of a person's hand, the fact is already in front of him, and he still has unrealistic illusions about India, and I am afraid that he will end up in a miserable situation of no return, so that the global Xiaomi company pays for India.
Of course, it also sounded the alarm for all international companies that want to create a world in India, production in India is risky, investment needs to be cautious!