Huawei employees worry about lay-offs after tougher US sanctions



Huawei employees are becoming increasingly worried about lay-offs after the US announced tougher sanctions that some analysts have called a “death sentence” for the Chinese telecoms equipment group.  Staff described a “state of war” in the company, with the new restrictions threatening to cut off the supply of semiconductors Huawei needs to power its 5G telecoms, smartphone, and other businesses. “Our company has been urging us to get used to this state of war,” said an employee in the company’s research and development department. “But we’re still worried. Will, our benefits are sacrificed, will the lay-offs finally land on me?” If all microchips . . . were restricted on August 17, what products can we still make? Huawei employee The tougher US sanctions, which were announced this week, were designed to close any loopholes in previous restrictions imposed by Washington as it cracks down on Huawei and other Chinese technology groups. The new rules will ban the sale without a license of any chips made using US technology in transactions that involve Huawei. The changes threaten a near blanket ban on the supply of chips to the Chinese company given the prevalence of US technology in the semiconductor industry, analysts say. “The people who were extremely concerned have already left,” the employee in research and development said, referring to colleagues departing the company. Another engineer said he no longer needed to work overtime, which was “unsettling”. “If all microchips, whether they be advanced, middling, or lagging, were restricted on August 17, what products can we still make?” asked another employee on a Huawei message board.  Employees and analysts said the ban could end Huawei’s main smartphone and 5G equipment businesses and affect other units, such as cloud computing, gaming, and virtual reality. Staff said transfers to other departments, departures, and lay-offs were mounting as Huawei retrenched after years of global growth. The company has refocused on its home market, where its smartphone sales are booming and demand for its telecoms products is high amid a 5G rollout.


The company’s growth slowed to 13 per cent year on year in the first half of 2020. Redundancies and transfers were particularly high in Huawei’s global marketing team, with several executives departing, employees said. The company earned 65 per cent of its revenue overseas in 2013, compared with 41 per cent last year. “More and more staff are returning from overseas. Before employees would line up to apply for overseas assignments but now it’s being re-examined,” said an employee in Huawei’s human resources department. The employee added the postings were fewer and applicants were worried about the intensifying international tensions.


Huawei’s annual sales were $123bn last year. The company is a large employer in Shenzhen, the southern Chinese technology hub. It is also one of China’s premier research groups, with about half of its 194,000 employees engaged in research and development. Huawei’s in-house chip designer, HiSilicon, is also hurting after its main manufacturing partner, Taiwanese chipmaker TSMC, stopped taking orders. Richard Yu, head of Huawei’s consumer business, said this month the move by TSMC might mean the end of the company’s most advanced Kirin chips. “Lots of people have left, top people,” said a HiSilicon team member. Multiple employees in the unit said management had taken to emphasizing secrecy. “If you’re too high-profile, it’s easy to be sanctioned by the US,” the employee said. Huawei declined to comment on the latest US sanctions. Not all employees interviewed by the FT were worried about the sanctions. Some said staff had become used to Washington’s announcements and barely paid attention anymore. They said the company was prepared and self-sufficiency projects were well underway. Huawei had managed to survive and grow over the past two years in the face of growing US pressure on its customers and supply chain, they said.  “Having a strong adversary will force us to become even stronger,” said one employee.

Millions of American jobs lost during the coronavirus pandemic could take years to return, according to new projections released by the Internal Revenue Service, underscoring the depth of the damage inflicted by the crisis on the nation's labor market.

The IRS forecasts there will be about 229.3 million employee-classified jobs in the U.S. in 2021 — a drop of roughly 38.9 million from the previous year before the virus hit, the projections show. The data is an estimate of how many W-2 taxes forms the agency expects to receive that year.

The damage inflicted to the jobs market is expected to persist for years, the data shows, with W-2 filings still nowhere close to their pre-pandemic levels even in 2028. The IRS expects to see about 255.5 million that year.

Since the pandemic triggered an unprecedented shutdown of the nation's economy in mid-March, about 57 million Americans have filed for unemployment benefits.

The unemployment rate is officially at 10.2% after the economy added 1.8 million jobs last month, according to the Labor Department's July jobs report. The report marked the third consecutive month of job growth in the millions, the economy has so far added back less than half – about 42 percent – of the 22 million jobs it lost during the pandemic.

Nearly half of Americans whose families experienced a layoff during the coronavirus pandemic think the job loss will be permanent, which could mean that roughly 10 million workers need to find a new employer, according to a recent poll from the Associated Press-NORC Center for Public Affairs Research.

The poll showed that 47 percent of households with a job loss think it's permanent or probably not coming back. Comparatively, in April 78 percent of households with a job loss thought it would be temporary.

The findings come after a surprise jump in jobless claims.

Last week, more than 1.1 million laid-off workers filed for unemployment aid, reigniting concerns that the labor market's early recovery was already plateauing. It marked the biggest one-week increase in claims since mid-March.

"The lack of meaningful improvement suggests the recent positive momentum is running out of steam," said Scott Murray, an economist with Nationwide.