Thursday 19 September 2019

Huawei's Ren rallies staff as US pressure mounts

Defiant: Huawei founder Ren Zhengfei has urged staff to push the firm forward
Defiant: Huawei founder Ren Zhengfei has urged staff to push the firm forward

Sijia Jiang

China's Huawei will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers, as it grapples with a "live-or-die moment" in the wake of US export curbs, founder Ren Zhengfei said.

His remarks came as the United States said it would extend by 90 days a reprieve that permits Huawei Technologies to buy components from US firms to supply existing customers. But it also moved to add more than 40 Huawei units to its economic blacklist.

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In a memo sent to employees, Mr Ren asked staff to work aggressively toward sales targets, as the firm goes into "battle mode".

"The company is facing a live-or-die moment," Mr Ren, a former Chinese army officer, said in the memo, which was seen by Reuters.

Huawei confirmed the contents of the memo. "If you cannot do the job, then make way for our tank to roll. And if you want to come on the battlefield, you can tie a rope around the tank to pull it along; everyone needs this sort of determination," the memo said.

Huawei is a key theme in a broader, year-long US-China trade war, with Washington slapping it with the trade ban in May, citing national security risks. Huawei posted a 23pc revenue jump in the first half, helped by strong smartphone sales in its home market.

Mr Ren said in the memo: "In the first half, our results looked good; it is likely because our Chinese clients were sympathetic and made payments in time. The big volume made cashflow look good; this doesn't represent the real situation."

But he expressed confidence in Huawei's full-year results and said it needs to "spend the money and solve the production continuity issue", by ramping up strategic investment on things like production equipment.

According to the memo, Huawei is reforming its operation globally by granting more power to the front line, cutting out reporting layers and eliminating inefficient posts.

"In three to five years' time, Huawei will be flowing with new blood," Mr Ren said. "After we survive the most critical moment in (our) history, a new army (will) be born. To do what? Dominate the world."

While he said in June the ban was worse than expected and that Huawei's revenue may stay flat in the next two years, in the memo he called on staff to try their best in meeting a sales target outlined at the start of the year - which was to grow revenue to around $125bn (€113bn) from more than $100bn in 2018.

Reuters

Irish Independent

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