According to reports, Huawei CEO Ren Zhengfei warned colleagues that the company is seriously threatened by the current economic climate.
According to reports in the Chinese media sites Yucai and NetEase, Ren allegedly released a letter on Huawei’s internal networks where he urged the corporation to put cash flow and profit ahead of expansion and size.
According to Ren, the global economy could experience a decade of weak demand, with the years 2023 to 2025 projected to be particularly challenging. During this time, it will be important to concentrate on surviving.
According to reports, he expressed doubt about Huawei’s ability to “break through” the 2023–2024 period. The CEO attributed his pessimism to a confluence of post-COVID economic difficulties, the conflict, and US sanctions.
Therefore, he wants Huawei to put a stop to complicated initiatives that are very likely to fail, use its own cloud to increase efficiency, cut back on R&D for things like electric cars, and give up on ventures that have little chance of being profitable.
Ren hinted at personnel repatriation and a withdrawal from or downsizing in some foreign markets. Customer care will come first.
The business will also concentrate on IT infrastructure, a sector that, in Ren’s opinion, will continue to present prospects.
Huawei reportedly declined to confirm or refute the report, according to the South China Morning Post. The English-language Pekingology blog is written by Chinese official media journalist Zichen Wang, who considers Huawei’s position to be an affirmation of the memo’s existence.
According to Pekingology, Ren’s tweet gained a lot of attention in China because people saw it as another proof of the country’s ongoing economic slump, which has already caused the real estate market to collapse and a rise in youth unemployment.
Recent H1 statistics from Huawei showed sluggish growth and a sharp decline in profitability.
The company’s “device business was significantly hit,” according to company chair Ken Hu, but “our ICT infrastructure business maintained consistent growth.”
Ren’s purported comments seem to portend much more transformation for the Chinese powerhouse.
Ren might also be being negative: Competitors Alibaba and Tencent were unable to match the revenue rise that Chinese e-tailer JD.com revealed yesterday.
