TOKYO -- Huawei Technologies on Monday slashed its sales expectations for the next two years by $30 billion, setting expectations at roughly $100 billion in 2020, as it announced plans to retrench in the face of Washington's campaign to restrict the Chinese tech giant amid a bitter trade battle with Beijing.
Huawei’s founder and CEO, Ren Zhengfei, admitted that constraints imposed on the company's U.S. suppliers by the Trump Administration had taken a heavy toll on the group. Sales were now expected to be fall slightly over the two years from 2018, he said.
"It didn’t occur to us that [the US government] would take such as wide range of measures to limit and restrict Huawei," said CEO Ren Zhengfei on China Global Television Network.
He conceded that businesses would have to be restructured and production scaled back in response to the constraints on supplies. "We might shrink in size," he said. Nikkei earlier this month reported that Huawei had cut orders to suppliers significantly for the second half of this year.
Ren also said the company’s international smartphone shipments would fall by 40%, confirming reports from Bloomberg. He emphasized that business within China remained strong.
Ren insisted that despite the troubles, Huawei would not sell or spin off businesses. Nor would it cut back on research and development spending, he declared, in a sign that Huawei was determined not to cede its place as one of the world's major tech companies. The company is planning to invest $100 billion over the next five years in R&D on telecom infrastructure and in meeting European data protection standards.
Ren blamed politicians for the company's current problems, saying they had limited Huawei’s collaborations not only with key U.S. suppliers, but also with universities and other institutions.
The U.S. Commerce Department put Huawei on its trade blacklist in May, blocking American companies from doing business with the Chinese telecom equipment giant. Huawei announced last week it would postpone the release of its foldable smartphone, and an executive told U.S. broadcaster CNBC that it had to cancel the launch of the new Matebook laptop because of the blacklisting.