Some people familiar with the matter said that Huawei has cut its 2020 revenue target in India by 50%. Also, it plans to lay off 60%-70% of its staff, excluding the staff in R&D and global service centers.
Huawei’s move is mainly to respond to the sharp decline in the demand for equipment and services in India. Huawei has not yet commented on this.
Why Does Huawei Cut Revenue Target?
In 2017, Huawei India’s revenue was $1.2 billion, and it has declined year after year. One of the main reasons is that the financial situation of the Indian telecommunications company itself is tight. It has led to a decline in demand. Huawei has set its 2020 India revenue target in the range of $350 million to $500 million. It is lower than the previous $700 million to $800 million range.
Huawei’s reason for lowering its revenue target is that the company does not expect two major telecom customers in India to place new orders. Bharti Airtel and Vodafone Idea are Huawei’s two major telecommunications customers in the Indian market. The source said, ‘the company intends to reduce the number of full-time employees, contract workers, and third-party employees in India.’
The cooperation between Huawei and Bharti Telecom is under danger as well. The latter may cooperate with Ericsson. Last year, Huawei had lost orders from the Rajasthan region. Once Huawei loses its cooperation in the rest of Tamil Nadu, the cooperation between Huawei and Bharti Telecom will only provide equipment for the two service areas of the telecom company.
‘The layoffs mainly involve employees in the network support, on-site deployment, outsourcing, and sales departments, because the telecom operators currently have no new projects or intentions to reach new cooperation,’ a person familiar with the matter said.
Another person familiar with the matter said: ‘The company currently only needs a few people to maintain the annual contract it signed with the telecom operator. Those who are still in the company are very worried about their jobs because there are not many opportunities in the market.’
India Has Its Own Fault
Huawei’s consumer business or smartphone business in India has also been reduced. The company has not yet launched many devices in India.
Also Read: Huawei India CEO: The Indian Government Is Very Supportive Of Huawei
Previously, New Delhi had banned Indian state-owned operators from purchasing equipment from Chinese companies such as Huawei and ZTE. In addition, India has also informally promoted private telecommunications companies to replace Chinese equipment over time but does not want to disrupt consumer services.