Recently, some netizens broke the news on social platforms that Xingji Meizu Group carried out a round of large-scale layoffs a year ago, involving more than 40% of the employees in the R&D department, including many fresh graduates and old employees of the original Xingji era. There is even news that there are basically few mobile phone developers left in the original team of Xingji. So what is the truth, and why did Meizu carry out such large-scale layoffs?
The past and present life of the Star Age Meizu
Meizu Group is a technology company formed by the merger of Meizu Times and Meizu Technology in July 2022, headquartered in Wuhan, with its main business covering mobile phones, XR (virtual reality and augmented reality), cloud computing, chips and other fields.
Founded in 2021 by Shen Ziyu and a group of veterans from well-known companies such as Huawei, Alibaba, Tencent, and Qualcomm, the company aims to build a cross-platform ecosystem of smart terminals, including mobile phones, XR, smart homes, and other products. Xingji Times has received investment from well-known investment institutions such as Geely Automobile, Tencent, and Qualcomm, and its valuation has reached the level of 10 billion. Everyone is familiar with Meizu Technology, which is a mobile phone manufacturer founded in 2003 by Huang Zhang, which was once one of the most influential mobile phone brands in China, known for its product design and user experience, and has a group of loyal fans. However, in recent years, Meizu Technology has gradually lost its advantage in the market competition, with sales and market share continuing to decline, serious losses, and many negative news such as layoffs, wage arrears, and debts.
In July 2022, Xingji Times and Meizu Technology announced their merger to establish Xingji Meizu Group, with Shen Ziyu as chairman and CEO, and Huang Zhang retired behind the scenes as the group's chief consultant. The two parties said that the merger is to achieve resource integration and strategic synergy, jointly create a new intelligent terminal ecological platform, and enhance product competitiveness and market share.
In March 2023, Meizu Group was officially established, headquartered in Wuhan Economic and Technological Development Zone, and has branches in Zhuhai, Shanghai, Beijing, Chengdu and other places, with a total of more than 5,000 employees, of which R&D personnel account for more than 60%. The Group's main products include Meizu mobile phones, Xingji XR, Nebula cloud computing, Xingxin chips, etc., covering various fields of smart terminals.
In July 2023, Meizu Group announced the completion of a 2 billion yuan Series A financing with a valuation of 10 billion yuan, with investors including Geely Automobile, Tencent, Qualcomm, China CITIC Bank, etc. The group said that the financing will be mainly used for product research and development, marketing, channel construction and other aspects to accelerate the development and growth of the group.
In August 2023, Meizu Group announced the termination of its self-developed chip business and laid off all employees of the Chip Research Institute, including more than 40 fresh graduates. The group explained that in the face of the uncertainty of the global economic environment, it decided to abandon the chip business with high investment and long cycle, and focus more on product innovation and software user experience.
In January 2024, some netizens broke the news on social platforms that Xingji Meizu Group carried out a round of large-scale layoffs a year ago, involving more than 40% of the employees in the R&D department, including many fresh graduates and old employees of the original Xingji era. However, the company's compensation and year-end employee rights and interests were not in place.
Xingji Meizu's motivation for layoffs
Judging from the public information, the layoffs of Meizu Group are mainly concentrated in two business areas: chips and mobile phones. The chip business is one of the important businesses of Xingji Times and one of the forward-looking technologies of Meizu Group, but it was terminated in August 2023 due to high investment, long cycle and high risk, which is not in line with the group's strategic direction. The mobile phone business, which is Meizu's core business and the main source of revenue for Meizu Group, was significantly laid off in January 2024 due to low market share, poor sales and heavy losses, which did not meet the group's profit target. These two business areas also happen to be the areas with the largest number of employees in the original Star Era, so a large part of the employees who have been laid off are old employees of the original Star Era, and even include some executives and core talents.
On the whole, the motives for layoffs of Meizu Group may have the following aspects:
- In order to reduce costs, improve efficiency, optimize the team structure, and prepare for the upcoming listing. It is reported that Meizu Group plans to list on the Hong Kong Stock Exchange in the second quarter of 2024, with a target valuation of 20 billion yuan, compared with the current valuation of 10 billion yuan. In order to achieve this goal, Meizu Group needs to show good performance and growth on its financial statements, and layoffs are the simplest and most crude method, which can reduce labor costs, improve profit margins, and attract the attention of investors in the short term.
- In order to keep the core business, some non-mainstream businesses had to be abandoned. In the face of tight global chip supply and fierce competition, Meizu Group may not think that there is no need to continue to invest, but choose to give up and focus on its own advantageous areas. In the face of strong competitors such as Xiaomi, OPPO, and vivo, Meizu Group may not think it is necessary to continue to maintain it, but choose to shrink and focus on its own innovation areas.
epilogue
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