Huawei to cut jobs at US research unit despite potential for reprieve

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Huawei was present at CES Asia 2019 to showcase its latest consumer products in Shanghai, China on June 11, 2019. (Image credit: TechNode/Eugene Tang)
Huawei was present at CES Asia 2019 to showcase its latest consumer products in Shanghai, China on June 11, 2019. (Image credit: TechNode/Eugene Tang)

Huawei is planning to lay off employees at its American research and development (R & D) subsidiary Futurewei Technologies, according to the Wall Street Journal, citing people familiar with the matter.

Why it matters: Chinese telecommunications equipment giant has been struggling with its American blacklisting, although the Trump administration may grant a reprieve within a month, according to a Reuters report.

  • US President Donald Trump said at the G20 meeting in Japan last month that he would allow some tech exports to Huawei to resume. But the US Commerce Department said on July 3 that the company is still blacklisted and requests from American companies seeking to export products to Huawei were being reviewed “under the highest national security scrutiny.”
  • The Trump administration may approve licenses for companies to resume sales to Huawei in two to four weeks, according to a Reuters report on Monday, citing a representative from an unnamed manufacturer.

Details: Futurewei employs about 850 people in research labs across the US, including in Texas, California, and Washington states, said the report.

  • The number of layoffs could be in the hundreds, but the exact number can’t yet be determined, people familiar with the matter told the Journal. Some of Huawei’s Chinese employees in the US could choose to return home and stay with the company.
  • Several employees of Futurewei have already been notified of their dismissal, while further planned cuts could be announced soon, sources cited by the report said.

Context: Futurewei is Huawei’s US-based research and development arm. The firm has filed more than 2,100 patents in areas such as telecommunications, the fifth-generation wireless network, and video and camera technologies.

  • Futurewei was also reportedly working on separating its operations from its Chinese corporate parent since Huawei was put on the trade blacklist.
  • Futurewei plays a critical role in Huawei’s R & D partnerships with US universities. But the partnerships are also at risk as some universities have started to limit funding and research arrangements with the firm.