Huawei is looking to cut jobs. Huawei CEO Ren Zhengfei sent out emails to his staff on Friday saying to expect tough times ahead and that he will be firing “mediocre employees.”
This isn’t some sort of twisted agenda to put pressure on employees, rather a financially-motivated statement of fact.
It is in part due to many countries turning down Huawei’s 5G technology and scrutinizing the company’s business strategy. According to The Financial Times, Ren said:
“In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship.”
It seems that the company is preparing itself for future crises. Ren was quite straightforward in his remarks and did not try to sugarcoat the tough decision that lay ahead of him. He added:
“We also need to give up some mediocre employees and lower labour expenses.”
This decision is also based on the current political climate. The US’s FBI, NSA, and CIA have all warned the government and citizens that they suspect Chinese manufacturers of adding spyware to the products they sell overseas. The US made an appeal to allied countries to ban Huawei’s 5G infrastructure as well, claiming Huawei equipment is a way for China’s Communist Party to spy on other countries.
Germany was one of the first allies to take the US’s warning seriously. The European nation said it was considering banning Huawei products. The country added that security concerns are of “high relevance.”
However, the company had a tremendous 2018. Huawei sold 200 million units of their smartphones, which set a new record for the smartphone manufacturer.
Huawei said it made $100 billion in revenue in 2018 due to the wide range of smartphones the company produces appealing to consumers of every price bracket. The company’s core telecommunication business was also responsible for Huawei’s massive revenue.
It seems the company’s exponential growth will come to a halt, however, according to Ren.
The CEO’s appearance was a rare and confusing one. In his statement to the press, he also applauded Donald Trump, saying he is a great president “in the sense that he was bold to slash taxes…And I think that’s conducive for the development of industries in the United States.”
Ren, who is a former officer of the People’s Liberation Army, said that the US President had the opportunity to alleviate the tense situation between the two countries.
This was the first time Ren spoke to journalists since 2015. The CEO made these comments as his daughter Meng Wanzhou, who serves as Huawei’s CTO, is facing extradition to the US on charges of violating sanctions against Iran. He warned that this could have a negative effect on US-China relations in the future. A number of publications that attended a two-hour roundtable with the Huawei CEO at the firm’s newest offices in the industrial city of Dongguan confirmed Ren’s remarks.
These could all be empty words or a last-ditch effort to try and please Trump so he lifts the sanctions placed on Ren’s company. But the CEO is adamant that Huawei does not have any ulterior motives.
According to The Financial Times, Ren said Huawei has had “no serious security incident” and there is “no law in China [that] requires any company to install mandatory backdoors.”
But US’s concern with Huawei lies mainly with Ren and his past. Ren used to work as an engineer for the Chinese military. The US worries that Ren’s connections and his past knowledge could cause serious damage to US security and privacy.
Of course, Ren wants to keep peace with the US. During his talks with journalists, the CEO said he wanted to foster a spirit of collaboration with the US. The CEO said:
“The message to the US I want to communicate is: Collaboration and shared success. In our world of high tech, it’s increasingly impossible for any single company or country to sustain or to support the world’s needs.”
The CEO also refuted claims of Huawei being a player in the US-China trade war, saying that Huawei was just a sesame seed (that is, a tiny part) in the larger trade war.