As the company continues to struggle with the ongoing trade blacklist against it, Huawei Technologies has reportedly decided to lay off a massive number of its employees in the United States.
The Chinese telecommunications equipment manufacturer is expected to cut hundreds of jobs at its US-based research and development subsidiary, Futurewei Technologies.
Huawei's US subsidiary currently employs more than 850 people across different research labs in Texas, Washington, and California. Following the US' decision to place Huawei in the country's trade blacklist, Futurewei found itself on the frontline of the ongoing dispute, affecting its operations.
The restriction against its parent company mostly targeted its hardware imports and components trade, but research and patented technologies coming from the subsidiary were also still affected. Operations within the subsidiary were reportedly also negatively impacted as some employees in the US were being restricted from communicating with their colleagues in China.
Huawei employees from China were also reportedly being banned from visiting Futurewei's offices in the US.
A month ago, Huawei had apparently separated its US operations as a way to fight off the effects of the US restrictions. US employees were placed on a new IT system and Futurewei completely abandoned its use of Huawei's logo and branding.
Unfortunately, the tactic hasn't worked as its US business has continued to struggle with the American blacklisting.
Huawei and Futurewei were still treated as one entity by the US government, which meant that both companies faced the same restrictions.
Huawei has filed thousands of patents both in China and the US. In fact, the company had filed more patents last year than any other company globally. Futurewei alone filed more than 2,000 patents last year, according to the U.S. Patent and Trademark Office. Huawei reportedly intends to monetize those patents, but its efforts in the US were hindered by the ongoing blacklisting.
According to sources with knowledge of the situation, the layoffs will likely result in hundreds of people losing their jobs in the coming days. Chinese employees within Futurewei have reportedly been given the option to return home and stay with the company. Several employees have also reportedly already received their dismissal notice.
Following the meeting between US President Donald Trump and Chinese President Xi Jinping at the G20 summit in Japan, the US has announced an easement of restrictions against Huawei. Last week, Commerce Secretary Wilbur Ross announced that the US would be issuing licenses to select companies to allow them to continue trading with Huawei. The licenses were only granted to companies whose transactions with the Chinese firm posed no threat to US national security.
