News: ZTE India slashes its workforce by 30 percent

Employee Relations

ZTE India slashes its workforce by 30 percent

The layoffs come as the Chinese telecom gear maker's India business has now gradually shrunk and it also does not have enough projects in India, as per the report..
ZTE India slashes its workforce by 30 percent

ZTE has laid off almost 30 percent of its staff to nearly 600 amid mounting financial stress owing to declining India business as telecom operators have cut down on expenditure. ZTE is said to not have enough projects in India, although it has traditional customers including Vodafone Idea, Bharti Airtel and BSNL which too are financially troubled. As these partners also look to cut expenditures ZTE’s business takes further hit and forces them to cut some internal costs. 

"Resources aligned by ZTE to manage Bharat Sanchar Nigam Limited (BSNL), Vodafone Idea and Bharti Airtel networks are now cut down to more than half due to financial pressure and falling business," an industry source told ETT.

As per the report, out of the network teams dedicated to the three incumbent operators, 70 percent to 80 percent of them were asked to leave since the lockdown started, and were given two months’ salary as part of the severance package. The current workforce strength included on-roll, contract, and outsourced manpower. 

ZTE is not the only one cutting jobs, its counterpart, Chinese bellwether Huawei is also known to have laid off between 500 and 700 of its employees over the last six to seven months. With the number of operators falling from an average of 12 to just three in every service area, vendors have been left in a difficult position. India's 5G auctions, initially due to take place last year, are now likely to be held in August or September this year. As the pandemic brings along newer challenges, the telecom industry has much more to deal with. In one way or another, the global health crisis has indeed hit each and every industry and caused massive disruption. The job market is already facing the consequences with many laid off or furloughed. India's unemployment rate is now at a record high of 27.1 percent, according to the Centre for Monitoring the Indian Economy (CMIE). Of the 122 million who have lost their jobs, 91.3 MN were small traders and laborers. But a fairly significant number of salaried workers - 17.8 million - and self-employed people - 18.2 million - have also lost work. 

The numbers are worrisome as India had entered the lockdown with already high unemployment levels. At 8.7 percent, the rate was already at a 43-month high, up from just 3.4 percent in July 2017, according to CMIE.

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Topics: Employee Relations, #Layoffs, #COVID-19

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