Thanks to the COVID-19 pandemic and the escalating anti-China sentiments in the US and India, Huawei is now cutting its India revenue target for 2020 by up to 50%. The company is also laying off more than half its employees in the country amidst growing calls to boycott Chinese products and services in Asia’s third-largest economy.
According to sources quoted by ET, “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”. The report claims that the company’s networks division and consumer businesses have both seen massive layoffs. The only departments that have escaped largely unscathed are apparently the R&D and the Global Service Center.
Huawei was originally targeting revenues of $700-800 million (Rs. 5,200 crore – Rs. 6,000 crore) in India in FY20-21, but is now looking at a much more subdued topline of $350-$500 million (Rs. 2,200 crore – Rs. 3,700 crore). The company had earned a much more robust $1.2 billion in 2017 during more cordial relations between the two countries. However, Washington’s ban on Huawei’s Android usage, followed by increasing Indo-China tensions, have almost decimated the company’s business in India.
While the UK has officially joined the US in banning the use of Huawei equipment in the country’s 5G network, New Delhi has been less overt in its approach on the issue. The government, however, has barred state-run BSNL and MTNL from sourcing equipment from Chinese telecom manufacturers like ZTE and Huawei. It has also reportedly ‘recommended’ that the private telcos replace all existing Chinese equipment in their networks over time.