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Huawei founder sees "Live or the Moment" from US insecurity



(Bloomberg) – Ren Zhengfei, founder of Huawei Technologies Co., warned in an internal memo that the company is in a "live or the moment" and advised underutilized staff to form "Commando Squads" to explore new projects. Workers who fail will be cut salaries every few months and they may lose their jobs, the billionaire said yesterday.

Since May, Huawei has taken the disagreeable position of being both an established global technology brand and a member of the United States Entity list, which prohibits trade with American suppliers. Despite a series of 90-day reminders, the last of which was yesterday, the uncertainty caused by American sanctions has already cost the company a great deal. Even if Huawei is eventually brought out of the cold, the effects of the upheavals this summer will be far-reaching and painful.

The most immediate loss of Huawei is the international smartphone market. The Company's internal estimates show that it is expected to sell 60 million fewer phones by 2019 than would have been the case without US requirements. According to IDC data, Huawei's mobile phone shipments increased by 34% to 206 million in 2018. In the first quarter of 2019, the pace improved to 50%, while the competitors Samsung Electronics Co. and Apple Inc. recorded a decline in sales. By the second quarter, which was partially affected by US sanctions, Huawei's growth had dropped to 8.3%.

After successfully penetrating the European mobile communications market, Huawei was on the way to becoming the world's largest telephone operator, but the loss of Google's Android In his memo, Ren warned that laid-off employees must find a way to be useful ,

"They either form a commander-in-command to explore new projects – in which case they could be promoted to company commander if they do well," he wrote. "Or they find jobs in the single market. If they do not matter, their salaries are cut every three months.

Read more: Huawei founder wants an "invincible iron army" to take action against the US

The Huawei consumer sector is itself its growth engine. With 45% of sales last year, Huawei's phones and other devices business is critical to Huawei's future health. All allegations and sanctions imposed on Huawei have earned the company a significant reputation. This will not be fixed soon.

This is the loss of software engineering time for Huawei, which is committed to developing a potential Android replacement product. Following the US ban, the company switched to 24-hour days and worked in three shifts and three offices with up to 10,000 developers to eliminate the need for US software and circuitry. Huawei released its HarmonyOS this month just to show that it can code its own operating system, though very few people have convinced it that an Android alternative is in sight.

Less quantifiable, but still significant The talent drain Huawei suffers from is due to the disruption of his worldwide reputation. The company has downsized its workforce in response to the new circumstances.

Ren said that the company's priorities are for employees to "do meritorious deeds," and for management to "excel" outstanding people as quickly as possible and bring blood to our organization. "

When Trade Secretary Wilbur Ross stated that some US telecommunications companies were" dependent "on Huawei technology and needed time to wean themselves away. While the Washington authorities give Huawei a little more air, the company's situation is still very precarious, as the founder has hinted.

Without US trade intervention, Huawei would threaten Samsung with the world's crown the most. It's a successful smartphone provider that takes advantage of its 5G technology lead rather than calculating the cost of lost customers. The company remains in a strong position, but the momentum of its growth and the brilliance of its cutting edge technology has been mitigated by the actions taken by the US government.

To contact the reporters on this story: Vlad Savov in Tokyo at vsavov5@bloomberg.net; Gao Yuan in Beijing at ygao199@bloomberg.net

To contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Peter Elstrom, Vlad Savov

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