Huawei Technologies has cut its India revenue reportedly by up to 50% and is laying off over half of its staff in a phased manner. The decrease in demand for its devices, Honor and Huawei smartphones, has led to a marked drop in sales. Moreover, US sanctions and border tensions between India and China have taken a toll on the Chinese technology company. Reports said Huawei is cutting 60 to 70% of its Indian staff, excluding those in R&D and the global service centre. These functions, including retail, marketing, research and design, are getting impacted by the scaling down of operations.
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.
Huawei Honor India spokesperson told The Economic Times that based on business requirements, the company believes in optimally leveraging its talent. “In line with this, we have also hired employees in different verticals to ensure we drive our company’s goals for the market and remain competitive in the industry,” he said. “We are proud of our transparent work culture and ensure that every employee gets equal opportunities within the organization.”
However, industry watchers said Huawei and Honor had been overwhelmed with a lot of inventory due to rapidly falling sales. Counterpoint Research in its data shows that there has been a decline of 18% in shipments for Honor after March till May, and the decline is expected to increase to 25 to 30% by July-end. This is attributed to the US ban and calls to boycott Chinese goods in India.
The Trump administration, in May, had added Huawei to an ‘entity list’ of companies barred from receiving US-made hardware and software components without its permission. Then in June, US President Donald Trump said American companies could sell equipment to Huawei, but there was no regulatory follow-up to lift the ban.
The Chinese technology company has reduced its revenue target in India from $700-800 million to $350-$500 million.