The world’s leader in consumer drones, DJI, is making major changes to its US operations, three niche US-publications reported this week citing DJI dealers. Monica Suk, a DJI spokesperson, confirmed that the company is making “organizational changes,” but didn’t comment on reported layoffs nor a change in strategy.
Why it matters: Journalists suggest that faced with mounting scrutiny from US lawmakers and prolonged supply chain disruptions due to Covid-19, the company is using the upheaval to pivot to a direct-to-customer model and/or working only with major dealers.
- The Shenzhen-based drone giant has been facing an increasingly uncertain future in the US. Lawmakers have been questioning its ties to the Chinese government and have advised consumers against buying their products.
- DJI holds about 77% of the US consumer drone market, Bloomberg said, citing data from US-based market research firm Drone Industry insights.
“We have made some organizational changes in order to adapt to today’s challenging economic environment, but we remain open for business everywhere we operate.“Monica Suk, DJI spokesperson
Details: It is unclear whether the reported changes are a result of turmoil caused by the Covid-19 pandemic, or if there is a wider organizational change in motion.
- According to the media reports, authorized DJI dealers in the US are having trouble getting shipments. Products are reportedly being stopped at the US border for unknown reasons whilst DJI’s productive capacity in China has yet to reach pre-lockdown levels. TechNode has not been able to independently confirm these reports.
- As a result, product stock in the US is limited and shipments have been inexplicably canceled, the reports said.
- Suk said that DJI factories have resumed operations and that the company’s “distribution network is shipping products across the globe.” She did not give any specific numbers as to whether productivity has been restored.
- One of the largest DJI dealers in the US told TechNode that any changes made will not affect their business but declined to make any further comments.
- Reporters with connections in the US market wrote about layoffs in DJI’S US staff, including repair and support staff and company representatives that liaise with dealers. New reps are assigned only to be switched again days later, said another news site citing posts on private dealer forums.
- A search on LinkedIn confirmed that several people terminated their employment at DJI in March. The reasons why their employment was terminated are unknown. Most past employees did not respond to TechNode’s requests for comment. One declined to comment.
- The company first confirmed that it is making “organizational changes” to reputable site DroneDJ. Chinese media said today that DJI denied (in Chinese) the reports of layoffs. The statement sent to TechNode doesn’t mention the reports of layoffs, only that employees have been working from home under government guidance.
Context: The Shenzhen drone maker is notoriously secretive and opaque. As a private company, it doesn’t release revenue and sales figures nor provides any details of its strategic plans. Media requests for interviews are seldom granted.
- DJI’s reputation was tarnished when a $150 million fraud scandal broke out in January 2019. In April 2019, A DJI employee was sentenced to prison for posting confidential information on Github.
- As the Shenzhen company became the world leader in consumer drones with a $21 billion valuation, and US-China relations have deteriorated, DJI has faced increasing scrutiny in American politics.
- The US army stopped using DJI products in 2017 due to “security concerns.” The US Interior Department grounded all its China-made drones in October 2019 for similar reasons.
- A bipartisan bill introduced in the US Senate in September 2019 seeks to bar federal agencies from buying drones made in China.
- Meanwhile, governments in Europe are using DJI drones to spray disinfectant and police areas under lockdown.
- Out of the company’s 17 offices, 4 are located in the US.