Huawei [HWT.UL] is the world’s largest telecommunications equipment manufacturers. The U.S. Commerce Department in May placed the firm on its “entity list” of organizations that pose security risks. The Justice Department has lodged charges against the firm claiming theft of trade secrets and other crimes. Huawei said the job cuts, starting July 22, were “due to the curtailment of business operations” caused by the U.S. government’s actions.

 

The trade blacklist has made it illegitimate for Futurewei to exchange sensitive technologies to its parent. The blacklist also limits Huawei from purchasing products from U.S. technology companies. On Monday, U.S. President Donald Trump agreed at a meeting with the heads of top technology companies including Alphabet Inc’s Google to make “timely” decisions on requests by U.S. companies to sell to Huawei.

 

Futurewei began slashing workers on Monday, Reuters had reported earlier citing employees, including one who spoke as he left the company’s Silicon Valley campus. One employee, who declined to give his name, said he had been let go, as he put a bag full of personal belongings into his car. Not less than half a dozen staff with boxes were seen leaving the office before noon on Monday.

 

An employee not affected by the layoffs said work had come to a standstill since Huawei was blacklisted. “On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect,” that employee said. “After that basically Futurewei has stopped doing any work - almost stopped everything.” Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office.

 

Huawei hired around 1,500 people in the United States including the 850 in Futurewei right before the layoffs. The rest of Huawei’s U.S. employees manage its supply chain, customer support, or serve functions such as public affairs. It had included sales executives and chip certification engineers given plans to enter the U.S. smartphone market. But its headcount has progressively dropped since January 2018, when a highly-anticipated deal to enter the U.S. smartphone market with AT&T and Verizon collapsed very last minute caused by pressure from the U.S. government.

 

TRONSERVE