Huawei founder warns of ‘painful historical period’ over next decade

Huawei’s first-half results showed a 52% drop in profits, according to Reuters calculations

Huawei’s founder has issued a warning in a leaked email to employees stating that the next decade will remain “difficult”, and that the world’s third largest smartphone maker should brace itself to go into “survival” mode.

Ren Zhengfei, in an email to his staff on Monday, said: “With survival the main principle, marginal businesses will be shrunken and closed, and the chill will be felt by everyone.”

His comments were reported by Chinese financial news outlet Yicai, which has since taken it down from its website, reported Fortune.

Referring to Russia’s ongoing war in Ukraine and the impact of US blockade of Chinese businesses, he added that the next decade “will be very painful” as the global economy continues to decline.

“Huawei must reduce any overly optimistic expectations for the future and until 2023 or even 2025, we must make survival the most important guideline, and not only survive but survive with quality,” The Guardian quoted him as saying in the email.

He also focused on the importance of the company’s traditional focus on information and communications technology (ICT).

“We must be clear that building ICT infrastructure is Huawei’s historical mission, and the more difficult the times are, the more we cannot waver,” he said.

He added that the “continued blockade” from the US along with the Covid pandemic would leave “no bright spot in the world” in the next three to five years.

His comments come as the US has put Huawei on an export blacklist in 2019 that disallowed it from accessing critical technology of US origin, reported Reuters.

The move hurt its ability to design chips and source components from outside vendors.

The US has also said that Huawei is a security risk, which the company has denied.

According to Reuters calculations Huawei’s first-half results showed a 52% drop in profits.

In conjunction with a weak economy, Covid pandemic induced disruptions and supply chain challenges have hurt the company’s device business that sells smartphones and laptops.

Mr Ren said that the company’s cloud computing, digital energy and smart car businesses as areas where the company should see development.