Reports of Huawei's plans of scaling down its US operations have now come into fruition as the company cut more than a third of its workers at its Futurewei Technologies research business.
The Chinese tech giant removed more than 600 employees this week as its US business continues to struggle under the restrictions implemented by the Trump administration.
The layoffs, which were announced on Tuesday, essentially cut 600 out of 850 jobs at Futurewei Technologies' research and development facilities in the United States.
Huawei's US-based subsidiary announced that the reason for its decision was to curtail its business operations amid the sanctions that are being imposed on it as part of Trump's efforts to force China's hand into a trade deal in the country's favor.
Huawei issued a statement following the layoffs mentioned that the decision was not an easy one to make for the company. The Chinese firm did reveal that its facilities in the US will continue to operate, albeit at a much smaller scale. Huawei also stated that its subsidiary will be strictly complying with all US laws and regulations.
As the trade dispute between China and the United States trickled down into the technology sector, Huawei had warned the US government that continued action against it would eventually result in the loss of US jobs.
Huawei's operations in the United States, specifically its research and development subsidiary, was put under a lot of pressure by US government agencies, which monitored all of its communications and activities.
The actions against Futurewei were initiated following Trump's signing of an executive order that barred US companies from doing business with Chinese firms deemed as a national security threat.
The order specifically targeted Huawei and its operations in the US. The ban resulted in the blocking and filtering of communications between Huawei in China and its US subsidiary.
According to the former head of the US Department of Homeland Security's national cybersecurity division and Huawei's current chief security officer, Andy Purdy, the US actions against Futurewei had pushed the company to the decision.
Purdy believes that it will be very difficult for Huawei to establish itself in the US again and that could have negative effects on the economy as a whole.
Futurewei currently supplies network equipment to a number of rural internet service providers across the United States. The company has offices and facilities in Texas, Silicon Valley, and a number of major US cities. Since the ban, the company had experienced a serious drop in its bottom line. This eventually led to the decision to cut operating costs, resulting in the layoff of employees.
