In brief: The Chinese telecom giant has been having a hard time running its U.S.-based research arm after being blacklisted by the Commerce Department, so it's now letting go of hundreds of employees that were an important part of its efforts to stay ahead in the 5G race.
Huawei is cutting the jobs of more than 600 people from its Futurewei research arm in the U.S., confirming an earlier report. The company made it official on Monday when it sent an email to more than two thirds of the division's workforce, explaining that the layoffs -- effective July 22 -- come as a result of the U.S. blacklisting that saw 68 of its other subsidiaries placed on the infamous "entity list."
Futurewei, which has offices in California, Texas, Illinois and Washington State, employed 850 people that were responsible with developing and patenting technologies for its parent company who poured $510 million last year into the efforts. Once the Trump order went into effect, the research arm became unable to export its work back to China, effectively coming to a standstill.
Reuters got word from one of the employees not affected by the layoffs that Huawei asked people who worked at Futurewei to beam all data back to its Chinese servers the day before the ban came into effect. Prior to that, they served a key role in securing over 2,100 patents related in part to 5G and camera technology. On a positive note, the Chinese telecom giant promised to offer severance packages to those who saw their jobs cut.
The U.S.-China trade war is having a great impact on Huawei's business, and while American companies are using a loophole to circumvent the ban, the company's struggle is far from over. Its smartphone business has been showing signs of slowing growth, and since its Android alternative isn't really a mobile OS, its future remains uncertain.
On Monday, President Trump said he would award U.S. companies licensing deals with Huawei in a timely manner, so there's still hope for the remaining 1,200 people involved with the company's local supply chain and customer support.