Huawei Founder Forecasts ‘Bitter Days’ Ahead, Announces Layoffs
* Comments follow last week’s remarks that company has won over 30 5G commercial contracts worldwide and that its revenue is expected to grow
* Company founder promises that layoffs will be on “a small scale”
(Beijing) — The founder of beleaguered Huawei Technologies Co. Ltd. said the tech giant is cutting staff as it faces headwinds in its emerging 5G business.
Ren Zhengfei’s comments came despite his saying last week the company has won over 30 5G commercial contracts worldwide and that its revenue is expected to grow this year.
The telecom network-gear supplier should brace for “bitter days” over the next few years as overall industry conditions may not be favorable, Ren said in an internal email to all employees on Friday. He didn’t elaborate.
Ren didn’t say how many employees will get the ax, but said the layoffs will be on “a small scale.” He also said Huawei’s overall human resource evaluation process should also be overhauled to better retain talented workers.
“We have had comfortable days for the past 30 years,” Ren wrote. “We have been expanding fast and we should now look at the efficiency of this move.”
The reclusive tycoon, 74, who hadn’t spoken to the media since 2015, last week met with both international and local reporters in separate interviews to rebut accusations that Huawei is spying for China by installing “back doors” in its equipment, and argued that the company firmly stands on the side of customers when it comes to cybersecurity and privacy.
Huawei has long been suspected of espionage because of Ren’s history as a former military engineer. The company has come under attack in the U.S., while Australia and New Zealand have started barring its equipment. Earlier this month, Polish authorities arrested then-Huawei executive Wang Weijing on charges of conducting espionage. Huawei subsequently terminated Wang’s employment.
The company has also been at the center of an international firestorm since its chief financial officer, Meng Wanzhou, was arrested Dec. 1 in Canada at the request of U.S. authorities. Meng is Ren’s daughter.
Ren last week said Huawei owns (link in Chinese) 2,570 5G patents, has struck over 30 commercial deals with global carriers, and shipped 25,000 5G base stations. The founder said this year’s revenue growth will be lower than it was in 2018, which is expected to see sales jump over 20% to $108.5 billion.
Huawei surpassed Sweden’s Ericsson AB to become the world’s largest telecom-equipment supplier in 2017, according to research firm IHS Markit. The No. 3 player was Nokia Oyj from Finland, while Huawei’s hometown rival, ZTE Corp., followed in fourth place.
Ren wrote in the email that Huawei pays $30 billion a year for its 180,000-strong headcount, including wages, bonuses and stock dividends.
An internal letter in October said Huawei should prioritize internal transfers for job vacancies over new hires, Caixin has learned.
Ren also underscored the importance of overhauling staff performance evaluations, saying each business unit should be empowered to make its own decisions instead of sticking to the fixed guidelines.
Huawei, along with its other technology peers in China, currently adopts a quota system in which the worst performers of a unit are fired after the annual review. That’s regardless of whether, for example, all team members of a particular unit performed well. These companies say the quota system encourages competition.
Contact reporter Jason Tan (email@example.com)
Mar 22 19:22
Mar 22 18:30
Mar 22 18:32
Mar 22 17:54
Mar 22 15:06
Mar 22 12:45
Mar 22 00:02
Mar 21 17:12
Mar 21 17:16
Mar 21 16:52
Mar 21 15:49
Mar 20 19:25
Mar 20 18:20
Mar 20 17:07
Mar 20 16:06
- 1China Became Net Importer of Rare Earths in 2018
- 2Popular WeChat Account Valued at 2 Billion Yuan Snapped Up By Education Firm
- 3China Securities Regulator Sets Out Ambitious 2019 Work Plan
- 4Update: It’s Banks’ Turn for the Hot Seat of Supply-Side Reform
- 5Analysts Butt Heads Over Outlook of China’s Surging Stock Market
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas