Meizu has retrenched ten percent of its workforce this year. Meizu explained that the retrenchment is needed to make the company more efficient and lean with reduced inefficiencies as it aims to increase its smartphone market share globally. Cutting of staff is not always good news but there are occasions that cutting staff is necessary to reallot resources elsewhere, with these resources going to the global expansion of the brand. Meizu, while not a major player within the western smartphone markets, still sold around 20 million units last year with the majority of the units sold in China.
Global expansion has long been in the cards for Meizu, which did numerous efforts to raise funds for its expansion. The company sought for investors, some of which include the Alibaba Group and Mediatek. Alibaba, a major Chinese e-commerce company, has even provided its YunOS to Meizu thought it is only available on a few devices so far. YunOS is a fork of Google’s Android operating system, with cloud services like email and online storage provided by Alibaba. Meizu has also considered an initial public offering (IPO) to raise money for its expansion as well.
Meizu has long tried to penetrate the Western market to reduce its dependency on the Chinese smartphone market. This is an important yet costly move, as the Chinese smartphone market has been slowly maturing and its cutthroat competition costing device manufacturers a pretty penny. Even Huawei, one of China’s largest smartphone manufacturers, saw flat profit growths this year with the company losing its top spot in the Chinese smartphone market to competitors Vivo and Oppo. Given the competition, smartphone manufacturers may need to spend more per device through marketing, reducing their profit per smartphone. Meizu, which lacks the financial muscle of Huawei, Lenovo, and Xiaomi, tries to find some creative ways to increase its market share globally without too much money spent on marketing. In one occasion, the company has turned to crowdfunding one of its products, a speaker, which ultimately may produce publicity for the brand. The publicity earned through this crowdfunding effort may spread to its other relatively unrelated products like its smartphones. Meizu has been really persistent in breaking into the US market, with the company selling their products in the US market since 2014.