Founder of Chinese tech giant Huawei Ren Zhengfei said that the company is faced with a “live-or-die moment” because of the United States export curbs and hence to tackle the situation, company would be spending more on production equipment this so that there is ensured continuity if supply of products. The company will also reduce role that are redundant and demote inefficient managers.

The comments by Zhengfei were made even while there were reports that the US Commerce Department was deliberating extension of a reprieve that permits Huawei Technologies to purchase components from American companies to continue to supply its existing customers by a further period of 90 days. At the same time however the Trump administration also added to its economic black list more than 40 of Huawei’s units.

The staff of Huawei was urged to work aggressively and achieve greater sales targets because the company was set to go into “battle mode” to survive the crisis. This message was to the employees was given by the 74-year-old Ren in a memo sent to employees on Monday loaded with military metaphors.

“The company is facing a live-or-die moment,” Ren, a former Chinese army officer, said in the memo, which some media has reported to have seen and was later confirmed by Huawei.

“If you cannot do the job, then make way for our tank to roll; And if you want to come on the battlefield, you can tie a rope around the ‘tank’ to pull it along, everyone needs this sort of determination!”

Huawei has also become embroiled in the trade war between the US and China which has been going on for more than a year. The company had been banned by the Trump administration as the US Commerce Department put it on its so called ‘Entity List’ which barred the company from doing any business with any American companies which constitute an important source for its global supply chain. The Trump administration also accuses that Huawei’s telecom equipment can be used by Chinese agencies to spy against western countries.

Despite the US ban, the company reported a 23 per cent increase in its revenue for the first half of the current year driven by a strong sale of its smartphones in its home market China.

“In the first half, our results looked good, it is likely because our Chinese clients were sympathetic and made payments in time, the big volume made cash flow look good, this doesn’t represent the real situation,” Ren said in the memo.

While expressing confidence in the full-year results of the company, he said it needs to “spend the money and solve the production continuity issue” by increasing investments in strategic areas such as in increasing production equipment.

The memo goes on to say that reforms in its global operations would be done through empowering of the frontline staff, reducing the layers of reporting and eliminating positions that it found to be inefficient. The company has a staff strength of almost 190,000 people globally.

“In 3-5 years time, Huawei will be flowing with new blood,” Ren said. “After we survive the most critical moment in history, a new army would be born. To do what? Dominate the world,” Ren said.

(Adapted from Reuters.com)

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