China’s Huawei will spend more on production equipment this year to ensure supply continuity, cut redundant roles and demote inefficient managers as its grapples with a “live-or-die moment” in the wake of US export curbs, said founder Ren Zhengfei, reported Reuters.
His remarks come as the US said this week it will extend a reprieve that permits Huawei Technologies to buy components from American companies to supply existing customers by 90 days, but it also moved to add more than 40 of Huawei’s units to its economic blacklist.
Ren said in a memo sent to employees that “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.” But he expressed confidence in Huawei’s full-year results and said it needs to “spend the money and solve the production continuity issue” by ramping up strategic investment on things including production equipment.
According to the memo, Huawei, which employs nearly 190,000 people around the world, is reforming its operations globally by granting more power to the frontline, cutting out reporting layers and eliminating inefficient posts.
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