Huawei in Trouble?

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According to reports, Huawei CEO Ren Zhengfei warned staff that the present economic environment poses a serious threat to the company.

According to allegations in the Chinese media sites Yucai and NetEase, Ren allegedly released a message on Huawei’s internal networks. He urged the corporation to prioritize cash flow and profit over expansion and scalability.

Ren anticipated that a decade of weak demand would harm the global economy, with the years 2023-2025 being particularly bad. Throughout this period, it will be critical to focus on survival.

According to sources, he expressed doubt about Huawei’s ability to “breakthrough” the 2023-2024 era. The CEO highlighted the fighting, US sanctions, and post-COVID economic woes as contributing causes to his pessimism.

He wants Huawei to terminate difficult initiatives that are likely to fail. Other demands are to use its cloud and minimize R&D for products like electric cars. Last but not least, he is to abandon ventures with little prospect of financial success to increase efficiency.

Ren hinted at staff return and withdrawal from or downsizing in various international areas.

Ren will prioritize customer satisfaction

Ren believes that the corporation will also focus on IT infrastructure, a subject that will continue to give chances. 

The South China Morning Post reports that Huawei has refused to confirm or refute the report. Pekingology is an English-language blog written by Zichen Wang, a writer for the official Chinese media. She sees Huawei’s attitude as confirmation of the document’s existence. 

Ren’s tweet was widely debated in China, according to Pekingology, because people saw it as another piece of evidence of the country’s ongoing economic slump. That is to say, it has already resulted in the collapse of the real estate market and a surge in youth unemployment.

Huawei’s most recent H1 results showed modest growth and a significant decline in profitability.

The company’s “device business was significantly harmed,” according to company chairman Ken Hu, but “our ICT infrastructure business maintained consistent growth.”

Ren’s claimed words appear to presage a huge step forward in China’s transformation.

Ren may be harsh since rivals Tencent and Alibaba could not match the growth in sales recorded by Chinese online retailer JD.com this week.

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