Exclusive | ZTE chief demands cost cuts but promises not to reduce salaries in short term as full lifting of US ban nears

ZTE Corp, which is on track for the full lifting of a US export ban, will adopt stringent cost-cutting measures as part of efforts to get the business back on its feet but promised not to reduce the salary of its 80,000 employees in the short term, according to a speech by newly-appointed CEO Xu Ziyang.

ZTE and its subsidiaries should keep costs carefully under control and prohibit unnecessary travel and expenses during this time as the company has suffered huge losses from the US export ban, Xu said during a meeting with the company’s executives on Wednesday, according to internal meeting notes obtained by the South China Morning Post.

Xu also asked department heads to draw up plans for resource needs once China’s second-largest telecoms equipment maker resumes operations, dubbed internally as “T0”.

“The company will not make salary reductions at present and the payment of bonuses will not be affected,” Xu said during the meeting, according to the notes. Xu also asked the company’s human resources department to fend off talent poaching from the outside, saying that “key staff are the most valuable asset of the company”.

ZTE Corp on Wednesday signed an agreement with the US that will allow the Shenzhen-based company to deposit US$400 million in an escrow account, the final step required before the US Commerce Department lifts a crippling ban of nearly three months. “Once ZTE has completed the $400 million escrow deposit,” the Commerce Department said in a statement, the agency will “issue a notice lifting the denial order.”

ZTE shares surged over 20 per cent in Hong Kong trading on Thursday morning on news that the company is on the verge of achieving a complete lifting of the US ban. Its shares also rose by the 10 per cent daily limit in Shenzhen.