A key executive said the flagship smartphone business had missed internal profit targets and lost its top spot in China, the world’s biggest market, to new contender Oppo last year.
Richard Yu, head of its consumer business division that includes mobile device operation said mobile gear is still profitable but the profit margin is very low.
In an internal memo sent last Friday, Huawei Group founder and CEO Ren Zhengfei urged all employees to work hard, saying the company would otherwise “fall apart”.
“Thirty-something strong men, don’t work hard, just want to count money in bed, is that possible? Huawei will not pay for those that don’t work hard.”
This has rattled Huawei’s 170,000-strong workforce, 45 percent of which are in research and development,which is probably one of the least secure areas to be working.
“We are now all thinking more of the next steps, realising permanent employment with the company is no longer a given,” one worker moaned to the press.
According to company insiders, Huawei maintained its five percent annual quota to eliminate the worst performers, but was seen indirectly pushing underperformers out by asking them to relocate to undesirable posts.
“Huawei does not have a layoff plan,” the company said in an emailed response, declining further comment.
Consumer business chief Yu said in his New Year’s address to staff that the company needed to adhere to a “streamline strategy” in personnel as well as product portfolio as it must make profitability its focus in 2017.
“We will seek to improve efficiency and profitability by focusing on organizations at all levels, every employee, and every detail, and strictly control costs and risks to ensure sound development, ” Yu said.
“We will not tolerate low-performing managers, and prioritize removal of managers who fail to make noteworthy improvements after working in a position for several years.”