TOKYO -- Huawei Technologies founder and CEO Ren Zhengfei warned employees of job losses in a letter sent on Friday, as the company remains under close scrutiny in the U.S. amid the Washington-Beijing trade war.
In the letter based on a speech made in November, Ren said the Chinese tech company may have to ax "mediocre employees" and that "we need to prepare for times of hardship." Ren cited as an example that "5G cannot meet with no resistance like 4G," referring to fifth-generation technologies.
Building on comments he made in November about the company's human resources, Ren is now adding pressure on workers to prove their worth.
Huawei is the world's biggest telecom equipment supplier and second-largest smartphone vendor. Its products and business have now come under scrutiny over security risks in the U.S., Australia, the U.K. and Germany. Meng Wanzhou, Huawei chief financial officer and Ren’s daughter, was arrested in Canada in December at the request of the U.S. government, for alleged violations of U.S. trade sanctions against Iran.
Huawei's business will be hit if a proposal by U.S. lawmakers to restrict the sale of American chips and parts to Chinese companies, including it and fellow telecom equipment maker ZTE, that violate U.S. sanctions or export control laws is passed in Congress.
Ren said in the letter that Huawei employs 180,000 employees and its annual labor costs exceed $30 billion. He said that the company will focus on "contribution per employee."
Huawei also published another letter in the same vein by Ren in October. Ren, a former engineer in the People's Liberation Army and a current Communist Party member, founded Huawei with $3,000 in Shenzhen in 1987. His letters are filled with metaphors of war and soldiering, often noting importance of strategy and organization.
As the trade war roils on, Huawei is pouring billions of dollars into research and development as it builds up its in-house chip division HiSilicon Technologies to cut its reliance on foreign suppliers, including U.S. chipmakers Intel, Nvidia and Qualcomm. Earlier this year, the company announced a chip set meant to compete with Intel products for data center servers.