DJI denies report of layoff, while drone industry faces 'unprecedented' pressures
Published: Aug 17, 2020 11:22 PM

An employee of DJI flies the new Mavic 2 Pro drone at the flying area of a DJI store in Hong Kong in August, 2018. File Photo: VCG

Chinese drone maker DJI on Monday denied a media report of sweeping layoffs at the company, but analysts say the entire industry is facing unprecedented pressure due to the COVID-19 pandemic and a political crackdown from the US government.

"Considering that DJI has 14,000 workers, there would be no one left at the company based on Reuters' claim," Xie Tiandi, head of public relations at DJI, wrote on social media on Monday, according to a widely circulated screenshot. Xie suggested people "allow the bullet to fly for a while," a popular phrase on Chinese social media meaning allowing some time before drawing a conclusion.

Citing "current and former staff," Reuters reported on Monday that the Shenzhen-based company was looking to 'trim the fat' on its roughly 14,000 staff," including deep cuts to its global sales and marketing teams, due to the COVID-19 pandemic and rising political pressure.

In what appears to be a show of defiance, Xie noted that Reuters reported on Saturday that the US government was banning Chinese e-commerce giant Alibaba but "declared it was a fake news just hours later."

As part of its crackdown campaign against Chinese tech firms, the US government has been stepping up pressure on the Shenzhen-based drone maker. The US Department of Defense banned the use of DJI drones, while the US Interior Department has grounded its fleet of the company's drones. There have also been reports of "security weakness" in DJI's consumer drones, foreshadowing further crackdowns from the US government.

Despite Xie's denial of the media reports, the political clampdowns by the US have created "unprecedented" challenges for Chinese industries, said Ke Yubao, executive secretary general of the Aircraft Owners and Pilots Association of China.

"The US is attacking China on various fronts, which have definitely had an unprecedented impact on various industries ," Ke told the Global Times on Monday, adding that under such pressure, it is "very normal" for companies to layoff some workers. "Facing global and domestic pressure, the priority is to survive and the first move is to layoff."

DJI, which is also the world's largest drone maker, has a 77 percent share of the consumer drone market in the US, according to Bloomberg. That dominance could be at risk, if the US moves to ban the company's drones. DJI does not release revenue and sales figures.

Apart from political attacks from the US, the whole consumer drone industry is under heavy pressure due to the COVID-19 pandemic, which has trapped consumers around the world in their homes this year.

"The overall sale of drones have been largely impacted by the pandemic because many drones are used to shoot videos outdoors for motion pictures and tourism outlets," an industry insider told the Global Times.

The insider, who requested anonymity, said that although sales on the Chinese market are recovering quickly, they remain sluggish overseas.