SANTA CLARA, Calif. (Reuters) – China’s Huawei Technologies Co Ltd said it is slashing more than 600 jobs at its Futurewei Technologies research arm in the United States after being placed on a trade blacklist by the U.S. government.

Futurewei, which employed 850 people in the United States, began laying off workers on Monday, Reuters reported earlier, citing employees, including one who spoke as he left the company’s Silicon Valley campus.

Huawei is among the world’s largest telecommunications equipment manufacturers. The U.S. Commerce Department in May placed the firm on its “entity list” of organizations that pose security risks. The Justice Department has filed charges against the firm alleging theft of trade secrets and other crimes.

Huawei said in a statement the job cuts, effective July 22, were “due to the curtailment of business operations” caused by the U.S. government’s actions.

The trade blacklist has made it illegal for Futurewei to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. technology companies.

One employee, who declined to give his name, told Reuters he had been laid off, as he put a bag full of personal belongings into his car. At least half a dozen staff with boxes were seen leaving the office before noon on Monday.

Futurewei was set up in part to work closely with U.S. universities and researchers. In 2018, its operating cost was $510 million, Huawei said.

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Futurewei has offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas. It has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office.

A Futurewei employee not affected by the layoffs said work had come to a standstill since Huawei was blacklisted.

“On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect,” that employee said. “After that basically Futurewei has stopped doing any work – almost stopped everything.”

Reporting by Jane Lanhee Lee in Santa Clara and Sijia Jiang in Hong Kong; Editing by Bill Trott, David Gregorio and Himani Sarkar

Our Standards:The Thomson Reuters Trust Principles.

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