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Huawei CEO Ren Zhengfei said he wanted employees to contribute ideas about the company’s business direction. Photo: Xinhua

Huawei founder Ren Zhengfei seeks employee input on business direction amid struggle to reinvent company under US sanctions

  • Ren Zhengfei said ‘Huawei’s strategy should not be decided by a handful of people’ but rather ‘come from tens of thousands of experts’
  • Huawei is struggling to find a revenue source that matches the profitability of its once-thriving smartphone business

Ren Zhengfei, founder of Chinese telecoms giant Huawei Technologies Co, has called for employees to contribute ideas about the company’s future direction, according to an internal memo, as the company struggles to remake itself after US sanctions crippled its smartphone business.

Despite venturing into multiple business fronts from coal mining to car systems, the Shenzhen-based company with its 195,000-strong staff worldwide has yet to find a steady revenue source that can match the profitability of its once-lucrative smartphone unit.

Huawei’s sales last year shrank by nearly a third from 2020, although profits surged by 76 per cent thanks mostly to the one-off income from disposing of its Honor budget smartphone business.

According to an internal memo showing Ren’s discussions with employees last month, the CEO asked Huawei’s scientists and experts to hold cross-disciplinary discussions and “speak freely” about which direction the company should be headed. The memo was published on Huawei’s employees’ forum on Monday.


Canada bans Huawei and ZTE 5G equipment, orders removal by 2024

Canada bans Huawei and ZTE 5G equipment, orders removal by 2024

“Huawei’s strategy should not be decided by a handful of people … it should come from tens of thousands of experts who study our future direction and the path to get there,” Ren said, urging Huawei’s 6,000 experts and hundreds of thousands of engineers to join the discussions, alongside external scientists and consultants.

Ren said the ideas raised should be conducive to “value creation”.

“The transformation from ideas to projects and products will depend on the review by decision makers, and I hope everything the company does is within boundaries and creates short or long term value,” Ren said. “Your innovation should have business value, rather than just being an idea.”

Ren’s speech came amid Huawei’s ongoing efforts to diversify its business to counter the impact of US trade sanctions, which have cut off the company’s access to advanced US origin technology, including cutting-edge chips.

Huawei’s consumer business, which includes smartphones, has borne the brunt of the sanctions, with last year’s revenue down by half from a year earlier to 243.4 billion yuan (US$38.24 billion).

Huawei continues to maintain its mid to high-end smartphone lines after selling its Honor budget phone brand to a consortium led by the Shenzhen government.

This week, Huawei launched its new Nova 10 handset in mainland China. While the new model has a friendly starting price of 2,699 yuan, it does not support 5G, making it difficult to stand out among a plethora of options coming from Chinese rivals eager to replace Huawei, which is becoming increasingly irrelevant in the country’s smartphone market.

Vehicles seen in Huawei’s flagship store in Shenzhen, China. Photo: Celia Chen
While Huawei is also pushing into China’s competitive car market, the company has repeatedly said it would not make vehicles itself, but would instead continue to work with carmakers to supply components and in-car systems.

On Monday, Huawei launched Aito M7, its latest model developed in partnership with Chinese automotive brand Seres. The six-seater, priced from 319,800 yuan to 379,800 yuan, is equipped with the HarmonyOS Smart Cockpit.

Huawei’s previous model, the Aito M5, sold 11,296 units in the past four months, said Richard Yu Chengdong, head of Huawei’s consumer business group and automobile unit, at Monday’s event.

The executive said Huawei’s brand name was so powerful that the company could survive just by “making shoes and socks”, according to a report by Chinese tech media outlet IThome.