It’s no secret that Gionee is not doing well in the recent past. It has almost stalled the launches of new smartphones. According to reports from NetEase, the Shenzen based company is axing as much as 50 percent of its workforce at its headquarters.
The news should not come as a major surprise since last week the company had hinted at the layoffs. This move will affect a major chunk of workforce stationed at the manufacturing plant in Dongguan, China. As per the reports, a Gionee employee was quoted as follows, “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.”
Meanwhile, Gionee has officially responded and said that it has started conducting exit interviews for the employees and is also discussing the compensation plans. Rumors have been afloat that Gionee is not able to pay its suppliers and advertising partners. Earlier this year, a court in Dongguan had ordered a freeze on 41.4% shares that were being held by Gionee’s chairman Liu Li Rong.
At its peak, Gionee was the sixth best-selling smartphone brand in China. The ever-increasing competition coupled with the razor-sharp market dynamics of the Chinese market resulted in its downfall. Competitors like Xiaomi and Huawei have been well funded and as a result (not the only reason though) they have been leading the competition. Smaller companies like Gionee have been bearing the brunt of the competition, and the lack of funds has further catapulted them towards failure. That being said, it is still not fair to write off Gionee. We wonder if the company will make a comeback in the market just like how Coolpad just now did with the Mega 4A.