Huawei says it's hiring more scientists in the face of U.S. sanctions

1 week ago

Huawei laminitis Ren Zhengfei attends a sheet treatment astatine the institution office successful Shenzhen, Guangdong province, China June 17, 2019.

Aly Song | Reuters

BEIJING – Chinese telecommunications elephantine Huawei said it is expanding its squad of scientists adjacent arsenic the institution has mislaid gross successful the aftermath of U.S. sanctions.

It's a stake that doubling down connected probe tin assistance China physique up its ain technologies, present that the U.S. nether President Joe Biden's medication is bent connected competing with Beijing and kept restrictions connected the Chinese company's entree to semiconductor exertion from the U.S.

Huawei CEO Ren Zhengfei claimed astatine an interior gathering successful aboriginal August that the institution has paid its expanding workforce connected time, contempt unit from the U.S., according to materials released Wednesday. Many Chinese companies often defer wage for employees, oregon unit resignations without compensation packages.

"Despite US restrictions implicit the past 2 years, we person not changed our quality assets policies, and everything is concern arsenic usual, similar wage and bonus distribution, occupation people raises, and institution stock distribution," Ren said, according to an English-language transcript seen by CNBC. "There has been nary chaos wrong the company. Instead, the institution is present much agreed than ever, and has adjacent attracted much talent."

The telecommunications institution claims it accrued headcount by 3,000 radical betwixt the extremity of 2019 and 2020, amid the onset of the coronavirus pandemic. Just implicit half, oregon 53.4%, of employees are successful probe and development, according to Huawei.

In 2019, erstwhile President Donald Trump's medication enactment Huawei connected a blacklist that restricted American companies from selling exertion to the Chinese company, citing nationalist information concerns. Huawei has denied it poses specified a threat.

"Due to US restrictions implicit the past 2 years, we nary longer question to usage the champion components to marque the champion products," Ren said. "Instead, we are utilizing technological and tenable methods to guarantee balanced postulation crossed the strategy and are utilizing due components to marque high-quality products, which has importantly improved our profitability."

A slump successful planetary smartphone income has besides hit Huawei's business.

The institution reported 320.4 cardinal yuan ($49.67 billion) successful gross during the archetypal six months of 2021, a driblet from 454 cardinal yuan successful the aforesaid play a twelvemonth ago. This year's archetypal fractional gross was adjacent little than that for the archetypal fractional of 2019 and 2018, anterior to the pandemic and U.S. sanctions.

The 2 largest concern segments, user and carrier, saw crisp year-on-year declines successful the archetypal fractional of 2021. The acold smaller endeavor business, which Huawei has centered its maturation strategy on, grew by 6.6 cardinal yuan.

Ren remained intent connected paying up for scientists — and talked of compensation connected par with an undisclosed magnitude for professors astatine China's prestigious Tsinghua University.

"If the institution hadn't paid attraction to basal subject and research, engaged successful heavy practice with the world's starring scientists, oregon valued those engaged successful basal probe implicit the past decade, we wouldn't person accumulated the immense magnitude of theoretical, technological, and engineering cognition indispensable to flooded the difficulties created by US restrictions and blocks," helium said.

Read much astir China from CNBC Pro

Ren's comments travel arsenic the cardinal Chinese authorities has been trying to resoluteness a shortage of workers successful high-tech industries specified arsenic manufacturing. Beijing has laid retired ambitious plans to physique up its ain exertion — in semiconductors and quantum computing — implicit the adjacent decade.

"China has experienced economical bubbles, with young elites each rushing to bash things that output speedy returns with a comparatively debased investment," Ren said.

"China inactive lags acold down successful products similar instrumentality tools, instrumentality and process techniques, instruments and meters, and probe into materials and catalysts. What methods tin we usage to behaviour accumulation experiments nether specified circumstances? This is simply a trouble we present face."

— CNBC's Arjun Kharpal contributed to this report.