As the new year begins, a chilling wave of layoffs continues to sweep through the cross-border e-commerce sector. While American tech giants tighten their belts for economic winter, domestic tech companies are similarly implementing cost-cutting measures. Black Shark Technology, once a rising star in gaming hardware with substantial backing from Xiaomi, now finds itself embroiled in controversy over unpaid severance packages following massive layoffs.
A Star Dimmed: Black Shark's Compensation Crisis
The troubles at Black Shark Technology didn't emerge overnight. The company, which rose to prominence with its gaming smartphones, now faces severe financial difficulties. On January 11, numerous laid-off employees took to social media to accuse the company of withholding severance payments, with particular criticism directed at CEO Luo Yuzhou.
While internal company messages acknowledged operational challenges and promised to "make every effort to resolve funding issues," employees report receiving minimal compensation—some as little as symbolic 2,000 yuan payments, while many received nothing at all. With the Lunar New Year approaching, desperate employees resorted to public protests, displaying banners demanding payment of wages at company offices.
Amazon's Former Favorite: Glory Days Fade
For cross-border e-commerce sellers, Black Shark was once a familiar success story. The gaming-focused brand developed multiple well-received smartphone products and expanded into gaming peripherals, including cooling systems, controllers, and audio equipment. Several of its Bluetooth earphone models achieved impressive 4.5-star ratings on Amazon, with over 5,000 reviews from satisfied customers.
Ironically, even as the compensation scandal unfolded, job postings for overseas operations and Amazon specialists continued to appear on recruitment websites, creating confusion about the company's actual financial health.
The Downfall: A Clash of Capital and Market Forces
Black Shark's decline follows a predictable trajectory. Founded in August 2017 with substantial capital investment, the company received early funding from Xiaomi Group in 2018. Xiaomi remains a significant shareholder through indirect holdings, with Lei Jun ultimately controlling 36.13% of shares.
Market rumors in early 2022 suggested Xiaomi planned to sell Black Shark to Tencent for VR/AR development, though the deal reportedly collapsed over price disagreements. Subsequent rumors of interest from other smartphone manufacturers never materialized. By October 2022, reports emerged of massive layoffs—nearly 50% of staff—with particular cuts to the VR division that had expanded earlier that year.
More troubling revelations surfaced when former employees disclosed that CEO Luo Yuzhou had resigned from multiple subsidiary positions as early as October 2022, allegedly replacing himself with individuals with poor credit histories while company assets were being liquidated.
Survival in Question: Can Black Shark Weather the Storm?
Black Shark's predicament serves as a cautionary tale for cross-border e-commerce businesses. Even companies with strong backing and market recognition face risks of financial instability in today's competitive environment. For sellers and partners, thorough evaluation of financial health becomes crucial when selecting business relationships.
As capital markets tighten and competition intensifies, Black Shark's ability to survive remains uncertain. The company's future hangs in the balance amid these mounting challenges.