Futurewei Employees Become First Manpower Casualty In Trump Ban

Advertisement
Advertisement

Chinese corporation Huawei Technologies Co. has put on a brave face in the current Trump Ban on its products in the US and said that it wouldn't decrease its projects nor lay off workers, but reality is starting to sink in for Shenzhen's Pride as Huawei is now planning layoffs at US-based research and development subsidiary Futurewei Technologies.

Sources say the layoffs could be in the hundreds, with some 850 Futurewei employees in US research labs. Some employees have already been notified their jobs are gone, with others to be notified in the coming days and weeks. Some Futurewei employees will transition to jobs in China at Huawei's headquarters, rather than face unemployment.

Futurewei is a subsidiary of Huawei, but has distanced itself from the Shenzhen-based corporation in recent weeks due to Huawei's being placed on the US Entity List back in mid-May. Trump signed an Executive Order forbidding American companies to do business with Huawei. American high-tech companies such as Qualcomm and Intel stood to suffer the most, with Huawei investing $11 billion annually into the American economy in silicon chipsets, among other things.

Advertisement

The Trump Ban was designed to hurt Huawei and thus, China, but American companies have been reeling from the financial pain as well, so much so that American high-tech companies started working with the government to reinstate Huawei.

Even American tech giant Google, who issued an Android license revocation just days after Trump publicly announced the Huawei Ban, made a case for Huawei in Android saying that Huawei phones without Google's Android software were less secure and would pose a greater security risk than phones with Google software pre-installed.

Sure enough, President Trump, in negotiation talks with Chinese President Xi Jinping at the Osaka G20 summit, agreed to allow American companies to sell to Huawei once more.

Advertisement

Though this appears to be something of an olive branch for American companies, Trump and the White House still agreed to keep Huawei on the Entity List and continue to treat the corporation as a national security risk. It was said by the White House that giving American companies the "green light" to continue selling to Huawei isn't a "general amnesty" by Trump for Huawei.

Now the Trump administration says that it will even give new selling licenses to American companies willing to do business with Huawei, something that is highly unusual in light of Huawei's continued existence on the Entity List. And yet, it appears as though Washington is willing to give something of a truce to China, though the verdict is still out on the matter.

In recent weeks, Huawei's US subsidiary, Futurewei, has been in the news due to the company's banning Huawei employees from its offices as well as the use of the Huawei logo on its official Futurewei company stationary.

Advertisement

The company wants to separate itself from Huawei in any way possible to continue its research funding and partnerships with American universities. In light of Futurewei's decision to distance itself from Huawei, perhaps Huawei's decision to lay off workers seems to be justifiable for the company.

Also, Huawei's business in the US seems paralyzed in the current political climate. Since Huawei can't do business in the US in terms of sales, what good does there seem to be in keeping financial ties with a company (Futurewei) that has ostracized itself to save its arm and has banned Huawei from having anything to do with it? To maintain its US subsidiary, Huawei would have to consent to Futurewei breaking away to save itself. Subsidiaries have some sort of independence, but not that much.

Huawei stands to lose $30 billion over the next two years due to the Trump Ban. The company is already reeling from the Ban in Europe, as Huawei has seen a 40-60% decline in smartphone sales in Europe, especially in places such as Germany and Spain where the lack of Android on Huawei phones is a killer for profit.

Advertisement

Currently, Huawei is planning to bring its Mate 30 flagship series to market this Fall, but the company's HongMeng OS testing on the device hints that perhaps Huawei intends to use HongMeng as its Android alternative.

Huawei's chairman has said that HongMeng is for IoT solutions such as autonomous vehicles and not mobile devices, that Android remains Huawei's go-to platform, but Huawei's own Mate 30 testing of it indicates otherwise. Even Oppo and Vivo have tested HongMeng and found it to be 60% faster than Android, in part due to Huawei's new boot animations and somewhat simple camera app that doesn't rival even Huawei's EMUI camera app on Android 9.0 Pie.

Huawei plans to release its EMUI 10 Android "skin" for current devices with Android Q intact, but there appears to be no hope of an Android Q release for the Mate 30 and future devices. Sources say that Huawei is still testing its foldable smartphone, the device the company claimed it was no longer testing due to the design flaws behind Samsung's own Galaxy Fold and its subsequent recall, and that it too, could see a Fall release.

Advertisement

Huawei started working on HongMeng seven years ago as an Android alternative in the event of a US ban.