Huawei appears to be prepared for a long trade battle despite the US government’s promises of easing some restrictions. Wall Street Journal sources claim Huawei is prepping “extensive” layoffs.
The layoffs are expected at Huawei’s US-based research and development arm, Futurewei Technologies, the paper reported, citing unnamed people familiar with the situation.
The unit currently employs 850 people at several labs in the United States, but hundreds of them could be laid off, the report said.
Some of the company’s Chinese employees were given the option of keeping their jobs and returning home to work.
The administration of US President Donald Trump has put Huawei on its so-called entity list, which meant US companies needed a license to supply US technology to the Chinese firm.
Huawei, a leader in next-generation 5G wireless technology, remained barred from developing 5G networks in the United States, and the Trump administration is trying to convince its allies to do the same.
The move would be prompted by complications surrounding Huawei’s presence on the Commerce Department’s Entities List, which bars US companies from doing business with a given firm unless there’s explicit approval. Futurewei staff have been restricted when communicating with Huawei’s Chinese offices, according to the tipsters, since their work might be considered US technology despite the corporate connection. Reuters contacts recently said that Futurewei was trying to separate its operations from Huawei proper as a result of the US blacklisting.
If accurate, though, the job cuts could significantly hamper the tech giant’s research efforts at least until it boosts R&D outside the US. It also underscores the toll the de facto ban is having on the company’s business. Between this and talk of reduced phone production, Huawei may face tough times until and unless American officials give it a break.
