Smartphone maker Oppo cutting 20 percent in key business

Bloomberg - - Smartphone maker Oppo is cutting around 20% of staff in key software and device teams after it merged operations with affiliate OnePlus, the first major consolidation in a Chinese mobile industry struggling with chips shortages and Covid-triggered economic shocks.

Oppo, which has become the country s top-selling brand in 2016 for Apple Inc. customers said, is retrenching after expanding too rapidly on the hiring front in recent years and attacking a premium segment dominated by people familiar with the matter. The cuts affect important units including a team that customizes Android into its inhouse ColorOS, and an Internet of Things division that develops a spectrum of wearables such as smartwatches and earbuds, said the people, asking not to be identified discussing a private matter.

Since mid 2021, Oppo has merged with the redundant company OnePlus, with which it shares backers, to pool development resources and reduce overhead, but it is also creating smaller positions. Its R&D team for phones and overseas sales positions hasn t been impacted yet by cuts, one of the people said. A Oppo representative declined to comment for the story.

Shenzhen-based Oppo built one of China's biggest smartphone brands by tricking rural retailers to rally its special products and mobilizing its devices with larger batteries and memory. But huge investments to expand in India to Southeast Asia and Europe have not paid off as expected against fierce competition by Xiaomi Corp. and Apple. It now faces a China retail slowdown as Covid s resurgence locks down parts of the country.

At its peak, the company showered retailers with handsome bonuses to grab market share and commissioned a headquarters structure in Shenzhen designed by Zaha Hadid Architects, complete with 20-story vertical lobby and an art gallery.

Secretive Billionaire Is How He Toppled Apple in China. Read more:

The company, closely held by a secretive employees fund which counts businessman Tony Chen and his protege Duan Yongping as key founders doesn t disclose financial details. Oppo Global smartphone shipments surged 37% in the second quarter, but barely enough to keep its No. 1. According to research firm IDC, 4 ranking is calculated by MRP.

OnePlus has made deeper ingress into the U.S. market than any other Chinese brand to date, but it has also failed to directly challenge Apple and Samsung Electronics Co. among their premium customers by both companies. The local rival Huawei Technologies Co. also briefly claimed the country's largest smartphone supplier, sold much of its product business in 2020 after American sanctions choked off the supply of vital semiconductors.