Chinese telecom equipment maker Huawei has reduced its India revenue target for 2020 by up to 50% and is laying off 60-70% of staff. This excludes those in research and development and the Global Service Centre as per a media report.
The move comes as the company battles falling demand for its equipment and services amid border hostilities between China and India. India has joined the US and UK in raising security concerns over Huawei’s links to the Chinese government.
Meanwhile, New Delhi has already barred state-run carriers from sourcing equipment from Chinese companies Huawei and ZTE and is believed to have informally nudged private telcos to replace Chinese equipment over time, without disrupting consumer services.
Huawei is now targeting $350-$500 Mn in revenue for 2020, compared with roughly $700-800 Mn it was targeting earlier. As a result, it is thus “letting go of on rolls, contract and third-party employees in India,” said one of the persons in the know.
The company’s India unit employs close to 700 people on its rolls, plus hundreds through third-party firms, as per industry estimates. This excludes staff in the company’s R&D center. The workforce in network support, field deployment, outsourcing, and sales department is being impacted majorly as there are no new projects or any clarity on new business from telecom operators.
Consequently, the firm needs people for some annual maintenance contracts for existing businesses with telcos. Both the networks and consumer businesses have seen layoffs.
The move comes as the firm is finding it tough to expand its enterprise business in India, with no new major customer additions lately. The firm which competes with the likes of Ericsson, Nokia, ZTE, and Samsung is not expecting any new business from its only two major telecom customers in the country--Bharti Airtel and Vodafone Idea. The business provides enterprise networking products including routers and switches to various industries. The firm has also scaled down its consumer or handset business after a US ban. It hasn’t launched many devices in India. In the current situation, however, it is not the only Chinese vendor hit by recent developments. ZTE has slashed its workforce by almost 30% to nearly 600 due to declining India business as telecom operators have cut down on expenditure.
Update- In a statement to People Matters, Huawei stated, “We do not comment on market speculation. Reports suggesting layoffs of more than half of Huawei staff in India are untrue. Huawei has been a part of Indian ICT ecosystem for the past 20 years focused on building a better connected India. We continue to work closely with all our customers in the country. Our India operations and resources, backed by robust local talent are designed to meet any customer requirements.”