Market Dynamics Prompt Job Cuts in Smartphone Industry
New Delhi: As the smartphone sector grapples with escalating input expenses and a deceleration in sales, multiple brands are resorting to workforce reductions within their marketing, offline sales, and administrative support divisions.
Industry analysts estimate a staggering 15% decline in commercial and corporate positions in recent months, as companies trim the excess workforce that had been established during previous years of vigorous growth.
Despite these cuts, the ongoing trend towards premiumisation continues to bolster the overall market value.
This headcount optimisation chiefly impacts companies focused on low-margin, high-volume entry-level markets, which have experienced a sales downturn of 8-10% over the past year, as reported by Randstad India.
Yeshab Giri, Chief Commercial Officer for Operational Talent Solutions at Randstad India, remarked, “As consumer preferences increasingly gravitate towards premium models and online platforms, large-scale marketing and localized field activation teams are undergoing significant reshaping.
We estimate that corporate and commercial headcounts have been reduced by about 12% to 15% over the last two quarters.”
The repercussions are predominantly felt in non-core corporate functions, such as traditional marketing, regional field operations, offline retail channel management, and general administrative support.
According to an industry analyst, companies are proactively cutting sales, administrative, and overhead expenses as the smartphone market trends towards considerable brand consolidation.
“This consolidation has led to dramatic job losses, illustrated by the complete disbandment of OnePlus’s offline expansion team—resulting in the redundancy of around 60 employees—leaving executives who had been contemplating significant growth just months ago suddenly seeking new opportunities,” noted the analyst.
Staffing specialists indicate that Realme has also shifted responsibility for state operations to distributor agents, prompting more than 50 area business managers to transition to these agents’ payrolls.
Additionally, field force personnel from Xiaomi and Transsion are reportedly affected and actively searching for new positions.
However, a spokesperson for Transsion contested the claims of job reductions, stating, “In light of the current market dynamics, we are bolstering our on-ground teams and enhancing our marketing capabilities to strengthen consumer connections across India.”
Until press time on Friday, OnePlus, Realme, and Xiaomi had not responded to email inquiries for comments.
TeamLease has reported that these smartphone manufacturers are scaling back their frontline workforce, specifically their third-party contract staff and promoter networks, by 5-15% in particular regions where sales have diminished.
“This retrenchment is a consequence of a lower tolerance for underperforming retail outlets,” stated Balasubramanian A, Senior Vice President and Business Head at TeamLease.
“Previously, brands could accept up to 15% underperformance, but that threshold has shifted to single digits amid the prevailing market downturn.”
Executives in the industry suggest that these workforce reductions are part of a calibrated adjustment to align with current market realities and do not signify a systemic failure within the electronics ecosystem.
Brands are restructuring to adopt leaner frameworks, where employees assume broader and more fractional roles.
“We are witnessing product marketing professionals encompassing brand communications portfolios, while regional sales leads are instructed to manage multiple territories and bridge both online and offline distribution channels concurrently,” Giri added.
This shift implies a financial correction affecting incoming talent streams, with variable pay components now tethered to stricter performance indicators.
Giri noted that the aggressive salary increments of 40-50% typical of lateral hiring two years ago have corrected to a reduction of 15-20%.
Source link: M.economictimes.com.
