Yicai Global) Dec. 20 -- The reported layoffs at Chinese handset maker Xiaomi, whose profit slumped by more than half last quarter, are not as big as suggested, according to an insider.

“The number of employees involved in the layoffs reported by the media is wrong,” The Paper yesterday quoted a source at Beijing-based Xiaomi as saying. “It is far from such a large scale.”

News outlet Jiemian had reported the same day that employees at several Xiaomi departments said the company intends to cut its headcount by as much as 15 percent, affecting several divisions, including mobile phones and the internet.

Jiemian predicted Xiaomi would let go about 6,000 workers this time, or close to a fifth of its total. Some departments of Xiaomi’s China business were said to lay off 75 percent of their staff and the corresponding figure for the internet division was said to be 40 percent.

Xiaomi has collected evidence and initiated legal proceedings to rectify the rumor that started on Chinese careers platform Maimai, the insider told The Paper, adding that workers made redundant will be paid severance packages based on the N+2 model, or one month’s salary for each year of service plus two months.

Xiaomi’s third-quarter adjusted net profit slumped 59 percent to CNY2.1 billion (USD304 million) from a year ago, according to the company’s latest earnings report. Revenue fell 9.7 percent to CNY70.5 billion (USD9.9 billion) in the three months ended Sept. 30.

Income from handset sales tumbled 11 percent to CNY42.5 billion, as its global phone shipments fell 8.4 percent to 40.2 million as consumer demand softened amid surging inflation overseas and coronavirus outbreaks in China.

Shares of Xiaomi [HKG: 1810] closed down 2 percent at HKD10.56 (USD1.52) each today, after falling 1.8 percent yesterday.

Editor: Emmi Laine, Xiao Yi