Huawei employees are increasingly worried about layoffs after the US announced tougher sanctions that some analysts have called a ‘death sentence’ for the Chinese telecom group.
Staff described a ‘state of war’ in the company, with the new restrictions threatening to cut off the supply of semiconductors that Huawei needs its 5G telecom, smartphone and other businesses.
“Our company has encouraged us to get used to this state of war,” said a staff member in the company’s research and development department. ‘But we’re still worried. Will our benefits be sacrificed, will the atrocities finally land on me? ”
The tougher U.S. sanctions, announced this week, were designed to close any loopholes in previous restrictions imposed by Washington as it gets on Huawei and other Chinese technology groups.
The new rules will prohibit the sale without a license of any chips made with US technology in transactions involving Huawei. The changes threaten a ban on near-blankets on the supply of chips to the Chinese company, given the prevalence of US technology in the semiconductor sector, analysts say.
“The people who were extremely worried are already gone,” the research and development employee said, referring to colleagues leaving the company. Another engineer said he no longer had to work overtime, which was “uneasy”.
“If all microchips, whether advanced, medium or lagging, are restricted on August 17, what products can we still make?” asked another employee on a Huawei message board.
Employees and analysts said the ban could end Huawei’s flagship smartphone and 5G hardware companies and affect other devices, such as cloud computing, gaming and virtual reality.
Staff said transfers to other departments, departures and layoffs increased as Huawei retrenched after years of global growth. The company has once again focused on its home market, where its smartphone sales are booming and the demand for its telecom products is high amid a 5G outage.
A mobile phone assembly line at a Huawei factory in Shenzhen © Qilai Shen / Bloomberg
The company’s growth in the first half of 2020 went to 13 percent per year.
Redundancies and transfers were particularly high in Huawei’s global marketing team, with several executives leaving, employees said. The company earned 65 percent of its revenue overseas in 2013, compared to 41 percent last year.
“More and more staff are returning from abroad. Previously, employees would commit to applying for foreign assignments, but now it is being re-examined, “said an employee in Huawei’s Human Resources department. The employee added the postings were fewer and applicants were worried about the intense international tensions.
Huawei’s annual sales last year were $ 123bn. The company is a major employer in Shenzhen, the southern Chinese technology hub. It is also one of China’s most important research groups, with about half of its 194,000 employees engaged in research and development.
Huawei’s own chip designer, HiSilicon, is also hurting after its main production partner, Taiwanese chipmaker TSMC, stopped taking any orders. Richard Yu, head of Huawei’s consumer business, said this month the move by TSMC could mean the end of the company’s most advanced Kirin chips.
“A lot of people are gone, top people,” said a HiSilicon team member. Several employees in the unit said management had taken it upon themselves to stress the secrets. “If you are too high, it is easy to be sanctioned by the US,” the employee said.
Huawei declined to comment on recent US sanctions.
Not all employees interviewed by the FT were concerned about the sanctions. Some said staff were accustomed to Washington’s announcements and paid little more attention. They said the company was ready and projects for self-sufficiency were well underway.
Huawei had managed to survive and grow over the past two years in the face of growing U.S. pressure on its customers and supply chain, they said.
“Having a strong opponent will force us to become even stronger,” said one employee.
