In brief: Huawei’s placement on a US trade blacklist will see the firm lay off hundreds of US workers, according to a new report.
Since president Trump added Huawei to an Entity List back in May that prevents it from doing business with US organizations without a license, the tech giant has been suffering hard. Many consumers are wary of buying its phones, fearing that they will lose access to Android security updates and Google apps. Microsoft removed Huawei laptops from its store, and the firm indefinitely delayed the launch of its latest MateBook. Company CEO and founder Ren Zhengfei said he expects it to lose $30 billion over the next few years because of the ban.
According to the Wall Street Journal, Huawei workers in the US are also going to feel the effects of the trade restrictions. The company’s US development subsidiary, Futurewei, which operates research labs in locations across America, including Texas, California and Washington state, will be laying off hundreds of its 850 employees.
Some of the Chinese workers being laid off will reportedly have the option of relocating back to China and remaining with the company. A number of employees have apparently already been told they are being let go, with more planned layoffs set to take place later.
The job losses are partly because Futurewei’s research “could amount to U.S.-sourced technology under Huawei’s entity listing,” writes the Journal.
Things started to look up for Huawei when Trump appeared to be softening his stance on the company at the recent G20 summit. But rather than removing it from the Entity List, it appears the Commerce Department is merely willing to grant more US companies licenses to do business with Huawei—providing there are no threats to national security. Some American firms, however, are using a loophole to circumvent the ban.