Chinese handset maker Honor is scaling down its India operations and asking employees to resign across functions in a phased manner. This comes on the back of a rapidly falling demand for its devices after parent Huawei was added to an “entity list” of companies barred from receiving US-made hardware and software components without permission from the American government.

As per an ET report, the company has begun its first phase of downsizing. Those impacted comprise employees on the company’s roll as well as those who are not on its roll.

Huawei sells smartphones under two brands – Huawei, which caters to the mid- to premium segment, and Honor, which is aimed at the entry, or affordable price segment. The company employs around 6,000 people in India, including staff for Honor and those on contract. 

As per the report, retail, marketing, research and development, and design are some of the functions that will be impacted by the scaling down of operations. 

Analysts and industry watchers state that both Huawei and Honor have been left with a lot of inventory owing to falling sales. Last week, it was reported that Huawei Technologies is also planning to lay off employees in the United States as the Chinese telecoms equipment company struggles with its US blacklisting. As per the report, the layoffs are expected to affect jobs at Huawei's US-based research and development subsidiary Futurewei Technologies, which employs around 850 people in research labs across the country.