On January 30, Lei Jun, the Founder, Chairman, and CEO of Xiaomi group announced the establishment of two new governance bodies, the Operations Management Committee, and the Human Resources committee. CEO Lei Jun will be personally heading both committees and overseeing their operations.
Calling the new committee “a far-reaching change in the history of corporate governance” and “the first major event at the beginning of the year” Lei Jun explained its need, importance, and functions in his letter.
The Operations Management Committee will have officials and experts from various departments like marketing, business strategies, coordination, planning, budgeting, execution, and daily operations. The committee will have 12 members including Lei Jun along with Xiaomi Group President Lu Weibing who was previously the head of the sub-brand Redmi and Zeng Xuezhong the current SVP and President of the Smartphone division, who previously headed the smartphone division of ZTE.
The Human Resource Committee will have 7 people including Lei Jun, Lu Wiebing, and Liu De the co-founder and Vice-President of Xiaomi, and other Human Resources and General affairs departmental heads.
It seems like the new committees will play a vital role in shaping the future of the Xiaomi group as they involve leaders from its three major businesses: Smartphones, IoT and Consumer goods, and Internet services.
Internal reconstruction and organizational changes are not new to Xiaomi. Recently, Xiaomi re-assigned many of its officials and revamped and established different internal organizations to tackle different needs.
The company made more than 35 internal structural changes that included major events like the resignation of founder Lei Jun from many of Xiaomi’s affiliate businesses. In September 2022, Lei Jun also stepped down from his position as Chairman of Xiaomi Electronic Software Technology Ltd. and quit the director position of some of the sub-brands.
Why is Xiaomi Changing its Management Structure?
Xiaomi is rapidly changing its management structure to combat the pressure of losing its top positions in both China and India. The plunging sales along with the diminishing global demand for smartphones have also added to its worries.
Last year, for the first time in a decade, China’s smartphone sales hit a record low. According to an IDC report, in 2022, smartphone shipments in China were around 286 million units, a 13% fall from the previous year.
In India, which is the world’s second-largest smartphone market, Xiaomi held the top position for 5 consecutive years. However, in the fourth quarter of 2022, as Xiaomi’s sales dropped by 6% YoY, Samsung dethroned the company by becoming the new market leader.
The exit of former Xiaomi India head Manu Kumar Jain, along with Chief Business Officer Raghu Reddy and Marketing Head Sumit Sunal shows a major change in the internal management of Xiaomi India.
Rajeev Nair, Senior Analyst of Tech Insights said that though their exits do not directly affect the revenue and sales, the multiple resignations have definitely affected the company adversely, as seen by Xiaomi’s dwindling performance in the Indian market.
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(via)
