Huawei CEO Ren Zhengfei isn’t mincing words: he reportedly said in an email to his workers that “mediocre employees” will probably be laid off in the coming months as the company struggles with global distrust.
The warning to Huawei employees was first reported by The Financial Times; you can run up against the newspaper’s paywall right here. Business Insider excerpted some of the important bits for our reading pleasure:
“In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship. […] We also need to give up some mediocre employees and lower labour expenses. […] 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. […] In order to achieve overall victory, we need to conduct some organisational streamlining.”
Zhengfei’s remarks aren’t without cause. His telecommunications company has been widely criticized over allegations that its equipment allows the Chinese government to conduct international spying. Other complaints abound, including allegations that Huawei was actively skirting U.S. sanctions on Iran by continuing to sell its products in the country.
The first issue has seen the U.S. government ban its agencies from purchasing Huawei-made smartphones, servers, and other equipment. Some politicians even wanted to go a step further by completely banning products from Huawei and other Chinese tech companies from the country; they compromised by disallowing their use by federal agencies.
The second issue hit Zhengfei a little closer to home when Canada arrested Huawei CFO Meng Wanzhou, his daughter, at the United States’ request. Hearing that a leading executive has been arrested is probably stressful enough; dealing with the personal trauma of that same person being a family member would most likely make things even worse.
Huawei’s problems aren’t restricted to the U.S. Australia banned the company’s equipment from its 5G networks, as did New Zealand, and Germany is reportedly thinking about doing the same. China went so far as to threaten Canada (opens in new tab) with “repercussions” if it follows the other countries; we suspect the threat won’t actually help Huawei’s case.
These problems are partly outside Huawei’s control. The company is at the will of the Chinese government, and with tensions rising between China and much of the West, it’s all but guaranteed to be affected by the conflict even if it were totally innocent. (Which, let’s be clear, it almost certainly isn’t.) This warning to “mediocre employees” probably isn’t going to be the last less-than-optimistic message Zhengfei has to write in the years ahead.