Chinese handset manufacturer, Honor, has begun to lay off its employees in India in phases. The move follows the blacklisting of its parent company, Huawei, by the US government.
Huawei offers two brands of smartphones. The first one—Huawei— caters to the middle and premium segments, whereas, the second one—Honor— caters to the affordable price segment. It is the latter that accounts for the maximum share in terms of volumes.
With Huawei prevented from buying or receiving any components from the US without permission from the US government, overall sales have been adversely affected. The downsizing is in response to the fall in sales.
It is not just the permanent employees who have been asked to leave, but even the ones working on contract have been laid off. The Huawei workforce in India had a strength of 6000 people, including Honor staff and contractual employees.
The retail division has been affected the most as it employs the maximum staff, since it handles Huawei as well as Honor products. Other departments being impacted include the marketing, research and development, design as well as after-sales.
The Company had frozen hiring about three months ago. Some employees are said to have offered to take salary cuts to be able to stay with the Company and help sail through these difficult times.
Huawei and Honor will also have to clear a lot of inventory, which they have been left with because of the decreasing sales.
Post the ban by the US, Huawei had announced that it would go on selling Android-based smartphones from the available stocks of both Huawei and Honor brands.