SANTA CLARA, Calif.—The U.S.-based research arm of China’s Huawei Technologies—Futurewei Technologies Inc—announced worker layoffs on July 22, according to two Futurewei employees.
The layoffs come about two months after the U.S. government put Huawei on a trade blacklist, making it illegal for its U.S. subsidiary to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. technology companies.
Last year, 26 members of Congress sent a letter to Education Secretary Betsy DeVos, warning that Huawei’s partnerships with at least 50 U.S. universities “may pose a significant threat to national security.”
The fear is that Huawei is using university partnerships to scoop up research in areas such as artificial intelligence, telecommunications, and robotics, which could be used in hacking or spying operations or to give Chinese companies an edge over U.S. competitors.
Some universities are struggling with whether they can continue partnerships with Futurewei—which isn’t on the government’s entity list—even as they suspend funding and research arrangements with Huawei.
One employee said the layoff target was to remove 70 percent of the 850 Futurewei workers. That employee said a layoff list had been sent from Huawei’s headquarters in China, and aimed to eliminate any open source projects, projects related to near-term Huawei products, and any research and development in critical technology.
A second Futurewei employee confirmed layoffs were happening on Monday but declined to provide details.
Huawei declined to comment.
Huawei is among the world’s largest telecommunications equipment manufacturers. The U.S. Commerce Department in May placed the firm on its “entity list” of organizations that pose security risks. The Justice Department earlier filed charges against the firm alleging theft of trade secrets and other crimes.
Futurewei has offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas. Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office.
The Wall Street Journal reported earlier this month that layoffs were being planned.
The first Futurewei employee said work had come to a standstill since Huawei was blacklisted.
“On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect,” that employee said. “After that basically Futurewei has stopped doing any work—almost stopped everything.”
