Chinese technology giant Huawei is closely linked to China's military intelligence, and has been on the receiving end of punitive U.S. blacklisting. Today, WSJ reports that Huawei is said to be preparing to lay of hundreds of people from its U.S. based research and development subsidiary (let's get real, espionage nest) Futurewei.
The layoffs are expected to affect workers at Huawei's U.S.-based research and development subsidiary, Futurewei Technologies, according to these people. The unit employs about 850 people in research labs across the U.S., including in Texas, California and Washington state.
Huawei declined to comment. The exact number of layoffs couldn't be determined, but people familiar with the matter said they were expected to be in the hundreds. Some of Huawei's Chinese employees in the U.S. were being given the option of returning home and staying with the company, another person said.
Futurewei employees have faced restrictions communicating with colleagues in Huawei's home offices in China following the May 16 Commerce Department decision to put Huawei on its so-called entity list, which blocked companies from supplying U.S.-sourced technology to Huawei without a license, according to these people.
The WSJ reports that some employees have already been notified of their dismissal, and more planned cuts could be announced soon.
"Huawei is laying off as many as 850 people from its "R&D division" (aka Thievery Division) in the US," writes Hyman Capital's Kyle Bass. "Many have already received notices to go back to china and regroup or be fired. @HuaweiFacts hasn't posted the firings to its twitter site yet."
Out of $70 billion that Huawei spent buying components in 2018, roughly $11 billion went to U.S. firms including Qualcomm, Intel, and Micron Technology.
Today, Reuters reports the Trump administration "may approve licenses for companies to re-start new sales to Huawei in as little as two weeks, according to a senior U.S. official, in a sign President Donald Trump's recent effort to ease restrictions on the Chinese company could move forward quickly."
Huawei, the world's largest telecommunications equipment maker, was added to a Commerce Department list in May that prohibits U.S. companies from supplying it with new American-made goods and services unless they obtain licenses that will likely be denied.
But late last month, after meeting with Chinese president Xi Jinping, President Donald Trump announced American firms could sell products to Huawei. And in recent days, Commerce Secretary Wilbur Ross said licenses would be issued where there is no threat to national security.
Trump's reversal, and rapid implementation by the Commerce Department, suggests chip industry lobbying, coupled with Chinese political pressure, may well reignite U.S. technology sales to Huawei.
Two U.S. chipmakers who supply Huawei told Reuters in recent days they would apply for more licenses after Ross's comments. They asked to remain anonymous.
A customer response management company and a firm that simulates cross-sectional radar for Huawei are also likely to file applications in the coming days, according to Craig Ridgley, a trade compliance consultant in Washington.