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Huawei to build 'irony army' in restructuring drive to survive US sanctions

REN Zhengfei, the billionaire founder of Huawei Technologies, plans to implement a three- to five-year restructuring of the networking giant that would involve the creation of an 'iron army' to help it withstand the US sanctions that threaten the survival of its lucrative smartphone business and maintain its lead in next-generation wireless

Huawei to build 'irony army' in restructuring drive to survive US sanctions

REN Zhengfei, the billionaire founder of Huawei Technologies, plans to implement a three- to five-year restructuring of the networking giant that would involve the creation of an 'iron army' to help it withstand the US sanctions that threaten the survival of its lucrative smartphone business and maintain its lead in next-generation wireless

15 August 2019 - 19:00

REN Zhengfei, the billionaire founder of Huawei Technologies, plans to implement a three- to five-year restructuring of the networking giant that would involve the creation of an 'iron army' to help it withstand the US sanctions that threaten the survival of its lucrative smartphone business and maintain its lead in next-generation wireless.

The consumer business faces a 'painful long march', Mr Ren wrote in an internal memo seen by Bloomberg News and verified by a Huawei spokeswoman.



China's biggest technology company is grappling with an existential threat after Washington blocked Huawei from purchasing American technology, cutting off vital components from Qualcomm chipsets to Google's Android operating software.



Mr Ren said an internal revamp was now required to meet war-time needs, meaning organisations considered unnecessary or redundant will be scrapped.



'We have to complete an overhaul in harsh and difficult conditions, creating an invincible iron army that can help us achieve victory,' Mr Ren wrote in the letter dated August 2. 'We absolutely have to complete this re-organisation within three to five years.'



Mr Ren has spoken previously about a 'strategic withdrawal' from certain markets in response to escalating US scrutiny. Huawei itself hasn't been clear about how Trump administration curbs would impact its 190,000 employees worldwide but the company has begun to lay off US-based staff.



Huawei reported slower sales growth in the second quarter compared to the first as the ban started to bite, especially into a consumer business encompassing smartphones and laptops.



The company unveiled its in-house HarmonyOS last week, saying it can replace Android if Google's software was barred from its future smartphones. However, Mr Ren said the company required a lot more time to build an apps ecosystem, a major requirement for any operating software to thrive in the long run.


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