Increasing anti-Chinese sentiment has left Huawei with a low number of new projects. With no new product releases on the market, Huawei is heading towards revenue cuts and layoffs.

Chinese telecom giant Huawei has slashed its 2020 target revenue for India by 50 percent and it plans to lay off 60-70 percent of its staff. Media reports suggest that employees of the Research and Development (R&D) along with Global Service Center staff will not be laid off.

Increasing hostility between India and China has led to a steep fall in demand. India is now the third country after the US and UK who have flagged security concerns over Huawei’s links with the Chinese government. 

India has already barred state-owned companies from buying any equipment from Huawei and ZTE; experts believe the government has informally nudged private telecom companies to stop buying Chinese equipment and replace the existing equipment. 

Huawei India has posted a revenue of nearly $1.2 billion in 2017. However, the revenue dropped from then, initially due to financial stress in the telecom sector and now owing to anti-Chinese sentiment in India. For 2020, the company is targeting a revenue of $350-$500 million, earlier the figure stood at $700-800 million.

The company employs nearly 700 people directly and hundreds through third-party firms, according to various estimates. This number excludes the company’s staff in the R&D centre.

Bharti-Airtel and Idea are two major telecom customers of Huawei. Now the company is not expecting any new business from its partners. Besides, it is on the verge of losing existing business from Bharti Airtel.

Ericsson is slowly grabbing business from Huawei in the rest of Tamil Nadu (RoTN) that is under Bharti Airtel. The company had already lost the Rajasthan club late last year. Soon Huawei will be restricted to two Bharti Airtel circles in the country.

“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,” said an internal person to the Economic Times.

Another source added, “ They only need people for some annual maintenance contracts for existing businesses with telcos. People who are still with the company are worried about their jobs since there aren’t many openings in the market.”

In recent times Huawei hasn’t launched any of its new consumer or handset products in India. Post the U.S. ban on Huawei, scale down its production in the handset business and launched fewer products in Europe and other markets.

Due to reducing customers, the company is facing problems expanding its enterprise business in India. While Chinese competitors such as Oppo, Vivo is continuing to grow its operation scale, Huawei fell flat.

A source for ET added that the present situation of the company is as bad as it was in 2010 when Huawei faced similar backlash and scrutiny over its proximity to the Chinese government. 

Along with Huawei, ZTE also slashed nearly 30 percent of its workforce of 600 employees due to the declining business. ZTE business with all major telecom companies has been cut by half due to financial pressure and reduced growth.