Huawei Technologies Co’s (華為) founder intends to launch a three-to-five-year overhaul of the networking giant, creating an “iron army” that can help it survive a US onslaught, while protecting its lead in next-generation wireless.
Major structural shifts are around the corner as US sanctions threaten the survival of its cash-cow smartphone business, Ren Zhengfei (任正非) warned in an internal memo seen by Bloomberg News and verified by a Huawei spokeswoman.
The consumer business faces a “painful long march,” Ren wrote, a possible reference to the Chinese Communist Party’s historic cross-country trek.
Photo: AFP
China’s biggest technology company is grappling with an existential threat after Washington blocked Huawei from buying US technology, cutting off vital components from Qualcomm Inc chipsets to Google’s Android operating software.
Ren, 74, said an internal revamp is needed to meet war-time needs, meaning that organizations deemed unnecessary or redundant would be removed.
He did not provide details about how such a restructuring might unfold.
“We have to complete an overhaul in harsh and difficult conditions, creating an invincible iron army that can help us achieve victory,” Ren wrote in the letter dated Aug. 2. “We absolutely have to complete this reorganization within three to five years.”
Ren, a former engineer with the People’s Liberation Army, has a penchant for militaristic language. The entrepreneur has spoken previously about a “strategic withdrawal” from certain markets in response to escalating US scrutiny.
Huawei itself has not been clear about how the curbs set in place by US President Donald Trump’s administration would affect its about 190,000 employees worldwide, but the company has begun to lay off US-based staff, the Wall Street Journal has reported.
Huawei on Friday last week unveiled its in-house HarmonyOS, saying that it can replace Android if Google’s software is barred from its future smartphones.
However, Ren said that the company needed a lot more time to build an apps ecosystem, a major requirement for any operating software to thrive in the long run.
“Two bullets fired at our consumer business group unfortunately hit the oil tanks,” Ren said in his letter, without elaborating.
Still, Ren talked about Huawei’s edge against the US in 5G telecommunication technologies.
“The US doesn’t use the most advanced 5G technology,” the Huawei founder wrote. “That might leave it lagging behind in the artificial intelligence sector.”
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