Chinese conglomerate Huawei slashed its revenue targets by 50% and simultaneously decided to lay off 60%-70% of its Indian workforce. This layoff will not apply to R&D staff and the Global Service Center workforce.
The dispute along the Indo-Chinese border has caused a sharp downfall in demand for Chinese electronic products, and which led to the loss of revenue for Huawei, causing them to lay off a significant amount of their employees.
New Delhi has already barred state-run carriers from sourcing equipment from Chinese companies Huawei and ZTE. Private telcos have also been informally nudged to replace Chinese equipment over time, without disrupting consumer services.
Economic Times reports that the company’s India unit employs close to 700 people on its rolls, and hundreds more through third-party firms, according to industry estimates. This excludes staff in the company’s R&D center.
Huawei India noted revenue of USD 1.2 bn in 2017 but has seen a decrease ever since, due to a dip in the telecom market and the Indo-China dispute. Huawei is now targeting $350-$500 million in revenue for 2020, compared to roughly $700-800 million it was aiming for earlier.
Counterpoint Research’s analyst Anshika Jain said that there has been a decline of 18% in shipments for Honor after March till May and that the decline is expected to increase to 25-30% by July-end.
Huawei does not expect business from its two biggest partners in the Indian market – Bharti Airtel and Vodafone Idea. It is on the verge of losing business from Bharti Airtel Rest of Tamil Nadu (RoTN) to Ericsson and has already lost Bharti Airtel Rajasthan, leaving it with only two Bharti Airtel circles.
Since the only need for a manual workforce is people for some annual maintenance contracts for existing businesses with telcos, staff in network support, field deployment, outsourcing, and sales department is being impacted majorly as there are no new projects or any clarity about new business from telecom operators.
An executive said several officials had agreed to take salary cuts to remain with the company and align with the change. He said there has already been a freeze on hiring for the last three months.
Owing to the Indian government’s stentorian moves and due to the overwhelming boycott of Chinese electronic products in India, Huawei has been forced to let go of their employees and slash 50% of their expected revenue.