Huawei has published two of founder Ren Zhengfei’s internal speeches after rumors of staff cuts generated heated debate online. Ren responded to the rumors and explained that Huawei will undergo “human resources reform.” Many see this as a move to cut costs as the technology giant’s operating margin has been decreasing, falling from 12.2% in 2013 to 11.6% in 2015.

The rumors began to circulate earlier this year after former employees left comments on the Huawei public WeChat account HWxinsheng (华为心声 or “Huawei thoughts” in English) alleging that the Chinese conglomerate was going to let go delivery engineers older than 34 and research staff older than 40. The comments have since been deleted. In Ren’s most recently published speech, he expressed determination to see Huawei reform its human resource structure.

“Huawei focuses on selection, not cultivation. We do not over emphasize fairness. If we focus too much on ‘not losing at the starting line’ [people being unfairly disadvantaged due to their backgrounds], then we would discourage innovation,” Ren explained. “We need to debate and shake up the painful parts first, then obstacles to human resource reform will be reduced.”

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Linda Lew

Linda Lew is a Beijing-based journalist who covers technology, start-ups and business in China. You can reach her at lindalew at aliyun dot com.