Huawei founder Ren Zhengfei urges employees to prepare for hard days ahead and focus on profit not sales
- Ren told employees in a memo that they should focus on profits and cash flows instead of revenue to ensure the company’s survival
- The internal warning indicates Huawei is in crisis management mode amid falling revenues and profits
Ren Zhengfei, founder of Huawei Technologies Co, has written an internal memo to employees urging them to focus on profitability as opposed to sales, as the Chinese telecoms giant prepares to endure a global economic recession, according to people familiar with the situation who saw the memo.
Huawei declined to confirm or deny the internal memo.
The internal memo was intended to “send a chill to everyone” as the company’s survival is at stake amid the impact of US trade sanctions, Ren wrote. He added the next two years would be key and that employees should face reality when making forecasts about the business. “No more stories, we have to talk about the realities,” the memo states. “We have to survive first, and we’ll have a future if we can survive”, said Ren in the memo.
Revenue from the device business group, which includes smartphone sales, fell 25.4 per cent to 101.3 billion yuan from 135.7 billion yuan in the same period last year, as it continued to lose market share, both in China and overseas. Since 2019, Huawei has found itself at the centre of an escalating US-China trade war and has been banned from buying advanced US-origin technology, such as the chips that power its smartphones.
The company is yet to give up on the smartphone segment. Huawei said that it will introduce the latest edition of its Mate-series smartphones on September 6, more than a year after the Chinese company skipped the annual refresh of this premium handset line amid a challenging period for the China market and as it struggled with US sanctions.