Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      War of words erupts over home affairs database fee hike

      24 June 2025

      Don’t expect Starlink in South Africa anytime soon

      24 June 2025

      Finally! Tribunal unpacks why it blocked Vodacom’s Vumatel deal

      24 June 2025

      Samsung to unveil new folding phones at July event

      24 June 2025

      Capital Appreciation banks on payments to offset software slump

      24 June 2025
    • World

      Mira Murati’s Thinking Machines hits $10-billion valuation

      24 June 2025

      Watch | Starship rocket explodes in setback to Musk’s Mars mission

      19 June 2025

      Trump Mobile dials into politics, profit and patriarchy

      17 June 2025

      Samsung plots health data hub to link users and doctors in real time

      17 June 2025

      Beijing’s chip champions blacklisted by Taiwan

      16 June 2025
    • In-depth

      Meta bets $72-billion on AI – and investors love it

      17 June 2025

      MultiChoice may unbundle SuperSport from DStv

      12 June 2025

      Grok promised bias-free chat. Then came the edits

      2 June 2025

      Digital fortress: We go inside JB5, Teraco’s giant new AI-ready data centre

      30 May 2025

      Sam Altman and Jony Ive’s big bet to out-Apple Apple

      22 May 2025
    • TCS

      TechCentral Nexus S0E3: Behind Takealot’s revenue surge

      23 June 2025

      TCS | South Africa’s Sociable wants to make social media social again

      23 June 2025

      TCS+ | AfriGIS’s Helen Hulett on how tech can help resolve South Africa’s water crisis

      18 June 2025

      TechCentral Nexus S0E2: South Africa’s digital battlefield

      16 June 2025

      TechCentral Nexus S0E1: Starlink, BEE and a new leader at Vodacom

      8 June 2025
    • Opinion

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025

      Singapore soared – why can’t we? Lessons South Africa refuses to learn

      13 June 2025

      South Africa risks being left behind as stablecoins reshape global finance

      6 June 2025

      Beyond the box: why IT distribution depends on real partnerships

      2 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Sections » Huawei faces ‘live or die moment’

    Huawei faces ‘live or die moment’

    By Agency Staff20 August 2019
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp
    Huawei founder Ren Zhengfei

    Huawei Technologies founder Ren Zhengfei warned in an internal memo the company is at a “live or die moment” and advised underutilised employees to form “commando squads” to explore new projects. Workers who fail will have their salaries cut every few months and may lose their jobs, the billionaire said yesterday.

    Since May, Huawei has occupied the uncomfortable position of being both an established global technology brand and a member of the US Entity List, which bars it from trading with American suppliers. Despite a series of 90-day reprieves, the latest of which came yesterday, the uncertainty caused by American sanctions has already cost the company a great deal. Even if Huawei is eventually brought in from the cold, the impact of the upheaval will be widespread and painful.

    The most immediate of Huawei’s losses is the international smartphone market. The company’s internal estimates show it expects to sell 60 million fewer phones in 2019 than it would have done without the US impositions. In 2018, Huawei grew its mobile shipments by 34% to 206 million, according to IDC data, and in the first quarter of 2019 its pace accelerated to a 50% improvement while rivals Samsung Electronics and Apple both saw shrinking sales. By the second quarter, partially affected by US sanctions, Huawei’s growth had been slashed to 8.3%.

    The company’s internal estimates show it expects to sell 60 million fewer phones in 2019 than it would have done without the US impositions

    Having successfully penetrated the European mobile market, Huawei was on a path to becoming the world’s biggest phone vendor. However, the loss of Google’s Android, the brains inside its handsets, and the related Play Store app ecosystem made Huawei devices undesirable outside of China.

    Ren warned in his memo that redundant staff need to find a way to make themselves useful.

    “They either form a ‘commando squad’ to explore new projects — in which case they could be promoted to company commander if they do well,” he wrote. “Or they can find jobs in the internal market. If they fail to find a role, their salaries will be cut every three months.”

    The consumer division is, according to Huawei itself, its growth engine. Accounting for 45% of its revenue last year, the business that sells phones and other gadgets is instrumental to Huawei’s future health, and it’s taken a substantial reputational blow from all the allegations and sanctions levied against Huawei. That won’t be repaired anytime soon.

    Scramble

    On the same front is Huawei’s loss of software engineering time as it’s had to scramble to create a potential Android substitute. In the wake of the US ban, the company switched to 24-hour days, working as many as 10 000 developers across three shifts and three offices to eliminate the need for American software and circuitry. Huawei ended up hurrying its HarmonyOS out this month, just to demonstrate it can code its own operating system, though it convinced very few people that it has anything approaching an Android alternative waiting in the wings.

    Less quantifiable but still significant will be the talent drain that Huawei suffers from the tarnishing of its global reputation and the overwork that’s resulted from its efforts to recover. The company has downsized its workforce in response to its new circumstances.

    Huawei’s P30 Pro

    Ren wrote that the company’s priorities are for employees to make “meritorious deeds” and for management “to promote outstanding employees as soon as possible and infuse new blood to our organisation”.

    In explaining the fresh extension to Huawei’s reprieve from US sanctions, commerce secretary Wilbur Ross said that some American telecommunications operators are “dependent” on Huawei tech and need time to wean themselves off it. So, while the Washington authorities are giving Huawei a little more breathing room, the company’s situation is still very much precarious, as its founder has indicated.

    Without the US trade intervention, Huawei would be threatening Samsung for the crown of the world’s most prolific smartphone vendor and it would be capitalising on its lead in 5G technology instead of counting the cost of lost customers. The company remains in a strong position, but the dynamism of its growth and the lustre of its cutting-edge technology have both been diminished by the measures taken by the American government.  — Reported by Vlad Savov and Gao Yuan, (c) 2019 Bloomberg LP



    Huawei Ren Zhengfei top Wilbur Ross
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleHow to reduce your electricity bill – permanently
    Next Article Facebook users get control over data gathered from other sites

    Related Posts

    Huawei Watch Fit 4 Series: beauty, brains and a battery that won’t quit

    24 June 2025

    China is behind in AI chips – but for how much longer?

    13 June 2025

    Huawei bets on brains over brawn in AI chip race

    10 June 2025
    Company News

    Communication costs exploding? Telviva has a fix for UK-SA teams

    24 June 2025

    Section 18A deductions and BEE points – a strategic choice for business compliance in 2025

    24 June 2025

    Huawei Watch Fit 4 Series: beauty, brains and a battery that won’t quit

    24 June 2025
    Opinion

    South Africa pioneered drone laws a decade ago – now it must catch up

    17 June 2025

    AI and the future of ICT distribution

    16 June 2025

    Singapore soared – why can’t we? Lessons South Africa refuses to learn

    13 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.