Huawei subsidiary Futurewei cut 600 researchers from US operations

Chinese vendor Huawei Technologies’s revenue grew nearly 30% in the first half of the year as the company managed to secure the supply of critical components to keep production going despite U.S. technology export restrictions, Bloomberg reported citing sources with knowledge of the matter.

Huawei’s revenue growth of 30% in H1 represents a slowdown compared to a growth of 39% in the first quarter of 2019, but also represents an expansion compared to growth last year, Bloomberg said.

Huawei will announce its quarterly financial results later this month.

According to the report, the Chinese vendor is said to have rewarded a number of employees for helping it accelerate revenue despite U.S. restrictions.

Also, as a consequence of the U.S ban, Huawei dismissed 600 employees at its US-based research arm, Futurewei Technologies. The subsidiary employs around 850 people in the states of Texas, California and Washington.

In a statement, the vendor said that 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.

“Decisions like this are never easy to make. Eligible employees will be offered severance packages, including both pay and benefits,” the statement said.

Last month, the company’s founder and CEO Ren Zhengfei said Huawei is set to lose $30 billion in revenue as a result of restrictions imposed by Washington.

In May, the Trump administration confirmed that the U.S. Department of Commerce added Huawei to its Entity List, a decision that effectively banned the company from buying parts and components from U.S. companies without U.S. government approval. Under the order, Huawei will need a U.S. government license to buy components from U.S. suppliers.

At that time, firms including Google, Intel, Qualcomm and Microm had halted shipments due to the restrictions. Huawei relies heavily on computer chips imported from U.S. companies.

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

Earlier this week, President Donald Trump has agreed to grant “timely” licensing decisions to U.S. technology firms that want to sell components and services to Chinese vendor Huawei, the White House said in a statement.

The decision was adopted following a meeting between Trump and the CEOs of several U.S tech firms including Sundar Pichai of Google, Chuck Robbins of Cisco, Robert Swan of Intel, Sanjay Mehrotra of Micron, Stephen Milligan of Western Digital Corporation, Steven Mollenkopf of Qualcomm, and Hock Tan of Broadcom.

Following a recent bilateral meeting with Chinese President Xi Jinping in Osaka, Japan, President Donald Trump said that U.S. companies can sell their equipment to Chinese vendor Huawei as long as the transactions won’t present a “great, national emergency problem.”


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