China’s Huawei will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as its grapples with a “live-or-die moment” in the wake of U.S. export curbs, founder Ren Zhengfei said.
His remarks come as the United States said this week it will extend by 90 days a reprieve that permits Huawei Technologies to buy components from U.S. companies to supply existing customers, but it also moved to add more than 40 of Huawei’s units to its economic blacklist.
In a memo sent to employees on Monday loaded with military metaphors, 74-year-old Ren asked staff to work aggressively towards sales targets as the firm goes into “battle mode” to survive the crisis.
“The company is facing a live-or-die moment,” Ren, a former Chinese army officer, said in the memo, which was seen by Reuters. Huawei confirmed the contents of the memo.
“If you cannot do the job, then make way for our tank to roll; And if you want to come on the battlefield, you can tie a rope around the ‘tank’ to pull it along, everyone needs this sort of determination!”
Huawei is a key theme in a broader, year-long U.S.-China trade war, with Washington slapping it with the trade ban in May citing national security risks. Huawei, however, posted a 23% revenue jump in the first half, helped by strong smartphone sales in its home market.
Ren said in the memo, “In the first half, our results looked good, it is likely because our Chinese clients were sympathetic and made payments in time, the big volume made cash flow look good, this doesn’t represent the real situation.”