Huawei warns staff of job cuts as challenges multiply

Huawei founder and CEO Ren Zhengfei has warned staff about the possibility of job cuts as the number of challenges facing the company escalate and multiply.

Several countries are excluding the Chinese telecommunications equipment manufacturer from their 5G rollouts, while other nations are considering measures that would limit the company’s influence on their communications infrastructure.

The main basis for these fears is a perception that Huawei is linked to the Chinese government and that the use of the company’s equipment risks the possibility of backdoors that could be used for espionage. These fears are heightened by 5G because of the sensitive information these networks will carry.

Huawei job cuts

Zhengfei made a rare appearance last week to state that he and the company had never spied on behalf of the Chinese government and had no intentions of doing so.

But it’s now clear that Huawei is preparing for the worst. Zhengfei’s public warning was reportedly sent via an email to all staff and then published on Huawei’s online community late last week. He added that targets would need to be revised and that future growth might be slower.

TechRadar Pro understands the email was sent last November.

“In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship,” he is quoted as saying by the Financial Times. “Things went too smoothly for us in the last 30 years. We were in a phase of strategic expansion, our organisation expanded in a destructive way. We have to review carefully if all geographical subsidiaries are efficient.”

Huawei has effectively been frozen out of the US market, although it does provide equipment to a number of smaller players in the country, while Australia has banned its operators from using Huawei equipment in their 5G rollouts on national security grounds. It has also been reported that the US is urging its allies to take similar actions.

Meanwhile, Zhengfei’s daughter and company CFO Meng Wanzhou is currently being held in Canada as US officials attempt to extradite her to face charges of fraud related to alleged dealings with Iran. On top of that, a Huawei employee has been arrested on allegations of spying – although Huawei has dismissed that person and distanced itself from their alleged actions.

Huawei has repeatedly denied accusations of spying, pointing out that it works with security agencies around the world and that it sells products to more than 500 operators in 170 countries without issue. This includes the UK, where BT, EE, Vodafone and Three are all customers.

There is unlikely to be any enthusiasm for a ban among customers who value Huawei for its innovations and fear a reduced pool of suppliers will increase prices.

One operator that has lent its support is Canada's Telus, which has declared Huawei to be a "reliable" equipment partner.

Steve McCaskill is TechRadar Pro's resident mobile industry expert, covering all aspects of the UK and global news, from operators to service providers and everything in between. He is a former editor of Silicon UK and journalist with over a decade's experience in the technology industry, writing about technology, in particular, telecoms, mobile and sports tech, sports, video games and media.