The planned layoffs are expected to target employees working at Futurewei Technologies, the Chinese tech giant’s research and development subsidiary that employs workers in labs in U.S. states such as Texas and California, the Journal reported. The exact number of job cuts was not revealed, but sources told the newspaper that it could affect hundreds of employees.
Several Futurewei employees have reportedly been notified about their layoff, and more are expected to be announced in the near future.
Tensions between the U.S. and the Chinese tech giant have escalated since Huawei’s Chief Financial Officer Meng Wanzhou, the daughter of the company’s founder, was arrested in Vancouver, Canada in December at the request of U.S. authorities. Meng was accused of attempting to evade U.S. sanctions on Iran by trying to sell equipment to the country. The U.S. has also said Huawei is a national security issue — not a trade problem — amid the ongoing trade dispute with China.
In May, the U.S. placed Huawei on a blacklist that prevents U.S. companies from supplying computer chips, software and other components to the company without government approval. Trump gave the Chinese tech company a little relief in late June when he said he would allow some U.S. suppliers to sell components to Huawei.
“U.S. companies can sell their equipment to Huawei,” Trump said during a news conference following his meeting with Chinese President Xi Jinping at the G-20 summit in Japan. “We’re talking about equipment where there’s no great national security problem with it.”
Trump also confirmed in a tweet that he would allow some tech exports to the company.
“At the request of our High Tech companies, and President Xi, I agreed to allow Chinese company Huawei to buy product from them which will not impact our National Security,” Trump tweeted. “Importantly, we have opened up negotiations again with China as our relationship with them continues to be a very good one.”
Trump’s decision to allow sales to Huawei did not take the company off the so-called “entity list, Commerce Secretary Wilbur Ross said at an event in Washington, D.C. last week. U.S. companies will need to apply for a license to sell to the firm.
Huawei founder and CEO Ren Zhengfei estimated last month the tech company’s revenue will be $30 billion less than forecast over the next two years due to the U.S. government’s ban and ongoing trade dispute with China.