While exports have helped offset the impact of domestic slowdown on production and manufacturing, local sales promoter profiles are witnessing an indirect attrition as companies aren’t immediately replacing people who are leaving in these roles, industry experts said. While there are no job cuts yet, that could be a possibility if shipments do not pick up, they said
“We are observing a gradual slowdown in hiring for sales roles among handset manufacturers<\/a>, primarily due to the absence of replacements for employees who leave the company. This is ranging 5-6% in the first two months of Q1 (April-June quarter of fiscal 2024) as compared to (fiscal 2023) Q4,” Kartik Narayan, chief executive – staffing at HR services company TeamLease Services said.
India’s smartphone shipments fell 19% from a year earlier in the January-March period of 2023, recording their third consecutive quarter of a decline, a recent report by market research firm Counterpoint Research said. This was also the first time when the shipments fell in the first quarter of a calendar year.
“While 5G shipments<\/a> have improved year on year, the impact of 5G is not as transformational as we saw when 4G was launched, and hence this has percolated into a slowdown in hiring sentiment,” said RP Yadav, chairman and managing director at staffing firm Genius Consultants.
Counterpoint’s report said 5G shipments increased 23% on year for the January-March quarter, contributing 43% to India’s smartphone shipments during the period.
The overall slowdown in domestic shipments is making handset brands take a wait and watch approach towards their sales workforce. While no active layoffs have been seen so far, the lack of backfill — replacing employees who have quit — is an indication of indirect attrition, staffing experts said.
“In the coming months, if the shipment (uptake) does not improve, then we could be looking at some job cuts on the sales side,” an industry executive said.
On the production front, though, the increased focus on India as a manufacturing hub by the likes of Samsung<\/a> and Apple<\/a> has meant that production of handsets has not slowed down, meaning there is not much overall attrition.
“For some smartphone makers (those impacted by the domestic shipment slowdown), the attrition is 5% above what is considered normal. This segment has a lot of contractual workers and sees 25-30% attrition in the first two quarters of the (calendar) year. This is maybe 30-35% this year,” Tarun Pathak, research director at Counterpoint said.
This trend is more prominent in North India. In South India, where most of the factories producing handsets for export are situated, it is business as usual, he added.
Smartphone companies Samsung, Vivo<\/a>, Xiaomi, HMD, Oppo and Realme<\/a> did not respond to queries sent by ET.
Dixon<\/a>, which makes handsets for Motorola<\/a>, among other electronics, said it has increased hiring as production has not affected.
“Mobile handset manufacturing is still very labour intensive and so with export demands on the rise, we have been hiring more. So, the domestic slowdown has been offset by the export demand at least for manufacturing,” said Sunil Vachani, chairman and managing director, Dixon Technologies.
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