Huawei CEO Ren Zhengfei has addressed his employees in an internal memo, outlining a bleak future. Ongoing problems, the recession and more are not leaving the tech giant from China unscathed.
Huawei struggles to survive
The embargo by the U.S., the Ukraine war and the aftermath of the corona pandemic have apparently taken a toll on Huawei. Especially since the provider could soon be threatened with closure in Germany as well. Accordingly, the internal focus in the near future will no longer be on making profits, but only on bare survival.
At least, that’s what emerges from an internal memo from Huawei CEO Ren Zhengfei, which according to reports from various Chinese media such as Yicai was sent out as early as August 22 and can be read in full on Netease.
Zhengfei expects the global economy to continue to decline within the next decade. For the Group, the main issue now is survival, he said. To this end, the company will also completely abandon the market in “some countries”, the Huawei CEO added.
Development by 2025 crucial
The next three years in particular are all about survival for Huawei: “In 2023 or even by 2025, we have to see survival as the main goal.” In fiscal year 2021, Huawei’s corporate profit rose by around 76 percent, but sales took a huge hit, falling by nearly 30 percent.
Currently, they are behind expectations for 2022, but also behind last year’s revenue. No wonder, then, that Zhengfei is announcing austerity measures to keep Huawei alive.
“The whole company must use the budget effectively, can not blindly close all projects,” the CEO said in the memo. According to the memo, the budgets of the research and development departments would also have to be reduced, while another reduction in staff is also on the cards.
For some time now, Huawei has been focusing away from its original core business on other technology areas such as notebooks around the MateBook 16s (our review) or in-ear headphones like the FreeBuds Pro 2 (our review), after the smartphone division has barely been able to make a profit since the sanctions imposed by the US.
Although they keep trying here with new devices like the recently introduced Huawei Enjoy 50 Pro. But the buyers, at least in the U.S. and Europe, apparently remain largely absent.