Huawei is laying off workers in China as US sanctions bite
Sep 9, 2019
Huawei is reportedly laying off thousands of employees in China as the Shenzhen-based telecommunications equipment maker continues to struggle with a US trade ban that has cut it off from American suppliers.
Rumors about the layoffs have been circulating on an anonymous message board on Chinese professional networking platform Maimai over the past week. One post published by a verified Huawei employee on September 5 asking other laid off Huawei employees to join the discussion elicited 284 responses, 166 likes, and 135 shares.
Why it matters: The impact of the US sanctions on Huawei is forcing the company to cut jobs in its home country after company founder Ren Zhengfei warned of a $30 billion revenue dip in June.
- The US government granted Huawei an extended reprieve on August 19, allowing it to purchase from US suppliers for its existing customers.
- The company reported 23.2% year-on-year revenue growth in the first half, but company chairman Liang Hua warned of significant headwinds to come for its consumer business, which contributed 55% of its revenue during the time period.
Details: “It’s said that 6,000 people will be ‘optimized’ in September,” said a Maimai user who is verified as a Huawei employee, on a thread of the above-mentioned post, referring to a euphemism for layoffs.
- “Employees who were persuaded to resign will be offered an ‘N+4’ severance package,” commented another Maimai user claiming to be a Huawei employee. “N+4” is a calculation for the severance payout, with “N” representing the number of years employed by the company.
- “Huawei is reducing staff, and I’ve received lots of resumes [from Huawei employees],” wrote another anonymous Maimai user on Saturday. The post drew 70 comments and 58 likes.
- None of the Huawei employees based in Shenzhen, Hangzhou, and Kuala Lumpur that TechNode reached out to on Monday said they were aware of the matter.
- A Huawei spokesman told TechNode on Monday that the company doesn’t “have any comment at this moment.”
Context: Huawei has been cutting jobs at its US and Australia affiliates following the US ban in May.
- In July, Huawei sacked more than 600 workers at Futurewei, Huawei’s US-based research and development subsidiary, which the company attributed to a “curtailment of business operations” caused by the US restrictions.
- Huawei has laid off 100 of its Australian employees since its telecom equipment was banned from participating in the country’s 5G network rollout, and warned that the number of redundancies could grow to more than 400 over the next two to five years if the ban continues.