Ren Zhengfei, founder and chief executive of Huawei, has publicly warned of job losses as several more governments bar the embattled Chinese technology group from supplying equipment for 5G networks.
“In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship,” Mr Ren said in an email to staff.
He added that goals found to be unrealistic needed to be revised. “We also need to give up some mediocre employees and lower labour expenses.”
The warning comes as security concerns over Huawei are snowballing across the western world.
The detention of Meng Wanzhou, Huawei’s chief financial officer and Mr Ren’s daughter, in Canada on a US extradition request in December and the arrest of a Huawei executive in Poland on allegations of spying for Chinese intelligence earlier this month have fuelled western suspicions of the group.
Germany last week became the latest country to indicate that it would not allow Huawei equipment to be used in its 5G rollout.
In the US a bipartisan group of lawmakers proposed legislation that would ban the sale of US semiconductors and other electronics components to Huawei and ZTE, in what would be a re-introduction and expansion of earlier sanctions against the Huawei rival.
Mr Ren, a former People’s Liberation Army officer, issued his warning about a rocky road ahead at an internal cadre management seminar in November. But the chief executive’s office sent it out to all staff and published it on Huawei’s online community on Friday, as the company stepped up its efforts to manage the growing crisis.
“5G cannot possibly become as easy as 4G,” said Mr Ren in a speech peppered with military jargon and war metaphors. “Maybe a mine will go off here and there,” he said. “And even if there won’t be a big explosion all over the place, we will still need to feed 180,000 staff. Wages, salaries and dividends amount to over US$30bn a year.”
Huawei’s revenues are expected to have grown to $100bn last year from less than $1bn 20 years ago. Mr Ren suggested in his message that the days of uncontrolled growth were over.
“Things went too smoothly for us in the last 30 years,” he said. “We were in a phase of strategic expansion, our organisation expanded in a destructive way. We have to review carefully if all geographical subsidiaries are efficient. […] In order to achieve overall victory, we need to conduct some organisational streamlining.”
In a message to human resources executives delivered last October, also sent out on Friday, the Huawei chief called for a “revolution” at the entire company.
The tough messages come only days after Mr Ren, who normally shuns media attention, swung into action to rebut the US’s allegations against his company in a rare interview with a group of international journalists.
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