Huawei is planning mass layoffs at its U.S. operation Futurewei, according to a report in the Wall Street Journal, citing unnamed sources.
“When Huawei first came to the U.S. in 2001, they created the Futurewei brand for all Huawei businesses in the U.S.,” said William Plummer, former VP of external affairs with Huawei, in a message to FierceTelecom. “It didn't really catch on, but remained the name of the R&D organization.”
Futurewei employs about 850 people in the U.S. “They've been pretty public, including dozens of relationships with U.S. universities,” he said.
Futurewei employees work in research labs across the U.S., including in California, Texas and Washington. Many of these employees have also been active in open source groups that work on code for telecom and cloud networking.
The Wall Street Journal’s sources did not know the exact number of layoffs, but they said the number was “expected to be in the hundreds.” Some of Huawei’s Chinese employees in the U.S. are being offered the chance to return to China and keep their jobs, according to those sources.
This is just the latest blow to Huawei. In May, the U.S. Department of Commerce officially placed Huawei and 70 of its affiliates on the Bureau of Industry and Security’s (BIS) “Entity List,” effectively banning the company from buying components from U.S. companies without government approval.
Since May, the U.S. government has sent mixed messages about the Entity List. In early July President Donald Trump said that U.S. companies could sell high tech equipment to Huawei. And since then, Commerce Secretary Wilbur Ross has made an effort to clarify which specific products they could resume selling.
But, despite this reprieve from the list, it appears Futurewei employees are being hurt by the blacklisting. The Wall Street Journal said Futurewei employees have faced restrictions communicating with their colleagues at Huawei’s offices in China, hampering their ability to do their jobs.
The U.S. government’s Entity List is a separate issue from the ban of Huawei telecom equipment. The government is easing some of its restrictions related to the Entity List because it realizes this hurts U.S. component makers for whom Huawei is a big customer. But, the government is still banning U.S. companies from purchasing Huawei telecom equipment. The government’s logic is that China's government is an authoritarian regime, so Huawei would have little choice if its government told it to use telecom equipment for spying.