Huawei plans extensive layoffs at its US operations

Tuesday, 16 Jul, 2019

Some of the company's Chinese employees were given the option of keeping their jobs and returning home to work.

In this photo taken on 27 May 2019, a Huawei logo is displayed at a retail store in Beijing.

A Huawei spokesman told Reuters, "the Entity list restrictions should be removed altogether, rather than have temporary licenses applied for United States vendors".

But on June 29th, after the U.S. and China announced a truce in the trade war between the two countries, U.S. President Donald Trump announced that "U.S. companies can sell their equipment to Huawei". As Huawei remains on the US Entity List, US-based companies must seek special permission from the Trump Administration demonstrating that their business plans will not have a potential negative impact on US national security.

Tensions between the US and the Chinese tech giant have escalated since Huawei's Chief Financial Officer Meng Wanzhou, the daughter of the company's founder, was arrested in Vancouver, Canada in December at the request of USA authorities. They asked to remain anonymous.

Other U.S. moves against Huawei have included allegations of trade theft, fraud, and violations of sanctions on Iran - all of this occurring alongside a brewing U.S.

Out of $70 billion that Huawei spent buying components in 2018, some $11 billion went to USA firms including Qualcomm, Intel and Micron Technology.

"The senior official said that the licenses could be granted in two to four weeks".

A Huawei spokesman said at the time that the company had cut United States jobs but did not address whether it was discontinuing USA inverter sales. "Huawei has been discovered responsible of no related wrongdoing and represents no cybersecurity danger to any nation so the restrictions are unmerited". Suppliers need to be allowed to offer customer support help for chips they construct and promote overseas, or the approval to ship new American-made gear to Huawei and its subsidiaries world wide.

As such, the situation between the USA and Huawei appears to be far from over.

The tech industry has been lobbying vigorously to get Huawei back into the game, given that it's an important partner to many of US' biggest tech companies. The move to block Huawei's access to U.S. suppliers escalated the campaign. Those will mostly be on sales to China that won't put US' national security at risk. According to a former Commerce Department official, they aren't the only ones submitting applications with more already doing so.