Chinese telecommunications giant Huawei is set to cut 600 jobs at its US-based research arm, Futurewei Technologies.
This as the company starts to feel the heat after the US government put Huawei on an export blacklist, citing national security issues.
On 14 July, the Wall Street Journal reported Huawei planned extensive layoffs in the US. Recently, Huawei founder and CEO Ren Zhengfei confirmed the plan during an interview with Yahoo Finance.
In a statement sent to ITWeb, Huawei says due to the curtailment of business operations caused by the US Department of Commerce, Bureau of Industry and Security’s listing of Huawei Technologies and 68 subsidiaries on the “Designated Entity List”, effective 22 July 2019, Futurewei Technologies announced a reduction in staff, directly impacting over 600 US positions.
Futurewei is a research and development subsidiary of Huawei, incorporated in Texas in 2001. In 2018, its operating cost was $510 million, says Huawei.
“Decisions like this are never easy to make. Eligible employees will be offered severance packages, including both pay and benefits. Futurewei will continue to operate in strict compliance with US local laws and regulations,” the company says.
Last month, Ren said Huawei is set to lose $30 billion in revenue as a result of restrictions imposed by the US government.
The US has for months been rallying its allies to cut Huawei out of planned 5G networks, citing “national security threats” due to the company’s close ties to the Chinese government.
The blacklist has seen companies, including Alphabet’s Google and British chip designer ARM, limit or cease their relationships with the Chinese company.
Huawei has denied installing any backdoors in its networking equipment for alleged government spying.
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