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Huawei chairman warns of tough year ahead

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Eric Xu, Huawei rotating chairman.
Eric Xu, Huawei rotating chairman.

Huawei's rotating chairman Eric Xu has signalled a tough year ahead for the company, warning it may downsize or merge non-performing business units.

He has also cautioned that some employees would be made redundant or transferred to other teams to ensure focus and the company's survival. Additionally, Huawei is set to reconfigure its ICT business unit.

The goal of organisational transformation in the Huawei ICT business, Xu said, “is to support our commercial success in cloud and computing. We will do so by enhancing our expertise, efficiency and competitiveness in these domains.”

In his new year’s message for 2020, Xu said 2019 was an extraordinary year for Huawei. “Despite concerted efforts by the US government to keep us down, we've made it out the other side and continue to create value for our customers.”

However, he cautioned: “The external environment is becoming more complicated than ever, and downward pressure on the global economy has intensified.” In the long term, he said: “The US government will continue to suppress the development of leading technology – a challenging environment for Huawei to survive and thrive.”

As a result of the challenges ahead, Xu told his staff that the company needs to optimise its organisational structure and workforce “to unleash our company's vitality”.

In a strongly worded statement, he said by transforming Huawei, “our primary goals are to hone our ability to fight and cut red tape.

“Any teams that don't contribute to enhancing the competitiveness of operating units or improving strategic support and services will be merged or downsized. People who are made redundant during this process will be transferred to other teams to ensure focus and the company's survival.”

Moreover, Xu said: “We need to steadily roll-out contract reviews and conclusions at the rep office level, giving our rep offices complete autonomy in operations and contract decision-making. We need to do the same for experts, giving them more authority to make decisions in order to unlock their full potential.”

The Huawei chairman said enhancing the mobility of Huawei’s research and development employees is vital to keeping the company fresh and poised for growth.

“We must also step up efforts to develop local talent and help them maximise their value, so they can be the mainstay of our local business and the stronghold of local operations. Professional teams are the foundation of our day-to-day operations, and we need to invest more in their stability,” he said.

According to Xu, Huawei needs to set the right example and continuously revitalise itself by removing mediocre managers and complacent employees.

“To begin with, every one of us needs to fight inertia and rid ourselves of complacency. That goes for managers and their teams alike.

“At Huawei, we're not looking for senior managers who design their careers based on personal whim, but those who respond to the call of duty. Managers at all levels need to put company interests above personal gain and go where they are needed most, including hardship regions,” he said.

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