Huawei's CEO threatens to axe 'mediocre' staff after global security worries

Ren Zhengfei

Huawei CEO Ren Zhengfei warned of hard times ahead for the Chinese phone giant in an email to staff.
He warned of job losses and said that the company would likely have to axe "mediocre employees."
Huawei is one of the biggest companies in China, but is under scrutiny over global jitters that its telecommunications equipment lets the Chinese government spy on other nations.
Ren is the father of Huawei CFO Meng Wanzhou, who is currently under house arrest in Canada for alleged dealings with Iran.

Huawei CEO Ren Zhengfei sent an email to staff on Friday predicting trouble ahead for the company, thanks to multiple countries shunning the firm's 5G infrastructure and increased scrutiny of its business.

"In the coming years, the overall situation will probably not be as bright as imagined, we have to prepare for times of hardship," Ren said, according to The Financial Times.

Ren gave an ominous indication that job losses could lie ahead, saying "We also need to give up some mediocre employees and lower labour expenses."

Huawei's upcoming 5G infrastructure has been banned by a slew of Western countries as the US appealed to its allies to freeze the company out, fearing that Huawei equipment is a way for China's Communist Party to spy on different countries. Germany said last week it was considering a ban on Huawei equipment for its upcoming 5G networks over security concerns.

Huawei said it likely hit $100 billion in revenue in 2018, thanks both its consumer division which produces popular smartphones, and its core telecommunications business. But that explosive growth may slow down, Ren warned.

"Things went too smoothly for us in the last 30 years," he wrote, according to The Financial Times. "We were in a phase of strategic expansion, our organisation expanded in a destructive way. We have to review carefully if all geographical subsidiaries are efficient. […] In order to achieve overall victory, we need to conduct some organisational streamlining."

Ren — a former officer of the People's Liberation Army — recently gave a rare public appearance in which he called Donald Trump a "great president" and tried to assuage national security fears.

Ren's daughter and CFO Meng Wanzhou was arrested in Canada last month, reportedly charged on suspicion of breaking US sanctions on Iran. Ren recently told reporters that he misses her "very much."

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