Huawei confirmed a reduction in headcount but said the reduction was only 20 people, or less than 2 percent of its full-time employees in the United States.
“These normal resourcing changes reflect the need to maintain a sustainable and profitable infrastructure business in the United States for the long term, while we continue to recruit in line with the needs of our overall U.S. business,” the Huawei spokesman said. “Our commitment to customers is the highest priority, and we remains committed to serving and supporting all existing infrastructure and other customers. Our R&D, supply chain management and consumer business group operations in the US are unaffected by these changes.”
It is just shy of five years since a congressional investigative report was released on the security issues posed by Huawei and fellow Chinese company ZTE.
The report concluded that insufficient evidence was provided by either of the two companies to allay concerns of close ties with the Chinese government, creating a security risk for the United States. As a result, the report recommended that the U.S. government should not include Huawei or ZTE equipment in its systems. Private entities, including network providers, were “strongly encouraged” to not do business with them.
Since that report was released, carriers operating in the United States have been unwilling to risk using Huawei’s network equipment, out of fear of jeopardizing their U.S. government business ties, according to Iain Gillott, principal of iGR Research. After the report, Huawei concentrated on third tier wireless operators, wireless internet service providers and enterprises.
“The business that Huawei has here tends to be with smaller, rural operators, such as Union Wireless or non-critical parts of the network,” Gillott told eDigest. “A lot of enterprises have the same issue as the carriers. They do business with the U.S. government and their Boards of Directors are concerned about hacking and industrial espionage.”
Also in response to U.S. government concerns, Huawei asks each of its employees to sign a paper promising not to compromise the security of any customer. If trust was the main issue with Huawei, then the OEM’s image was certainly not helped by the verdict earlier this year where a jury awarded $4.8 million to T-Mobile in its lawsuit against Huawei Devices for allegedly stealing its smart phone testing technology.
“It gets down to whom the Board of Directors trusts,” Gillott said. “It is an interesting dynamic. The closest we can come to a homegrown OEM is Nokia or Ericsson, and they are Finish and Swedish.”
J. Sharpe Smith is senior editor of the AGL eDigest. He joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence.