China-based tech giant Huawei has undertaken a media blitz in recent days to counter the wave of negative headlines that have dogged the company for months now. The media campaign has been so large-scale that even the company’s reclusive billionaire founder and CEO made a rare appearance before the press to direct some extraordinary praise at President Trump in the hopes of extricating his company from all the bad publicity — and the effects of the ongoing US trade tensions between the country and China.
Still, it may not be enough to stop the damage at a company that had been very much hoping to displace Samsung this year as the biggest smartphone maker in the world. In light of the many challenges that confront his company at the moment, including the US spurring allies to not use Huawei technology over spying fears, company CEO Ren Zhengfei has warned employees that hard times are ahead.
“In the coming years, the overall situation will probably not be as bright as imagined,” Ren reportedly wrote in an email to Huawei employees in recent days. “We have to prepare for times of hardship.”
What that apparently means, among other things, is looming staff cutbacks. “We also need to give up some mediocre employees,” Ren’s email continued, “and lower labor expenses.”
Ouch. In large part, of course, this all stems from the recent arrest in Canada of Ren’s daughter — Huawei CFO Meng Wanzhou — ahead of extradition to the US. Huawei also finds itself beset with heightened scrutiny over the assumption by the US and its allies that China uses Huawei products as potential tools for spying. The company’s media blitz in recent days included Ren telling reporters he thought Trump is a “great” president, which was seen in many circles as a conciliatory gesture meant to hopefully tamp down US-led opposition.
Nevertheless, Ren also told employees in his email that “things went too smoothly for us in the last 30 years.” While the company estimates it reached $100 billion in revenue last year, due in part to growth in its smartphone business, that’s expected to slow down very soon.
“We were in a phase of strategic expansion,” Ren’s email continued. “Our organization expanded in a destructive way. We have to review carefully if all geographic subsidiaries are efficient … In order to achieve overall victory, we need to conduct some organizational streamlining.”