Huawei’s Founder to Kick off Five-year Overhaul of Company

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Huawei Technologies Co.’s billionaire founder intends to kick off a three- to five-year overhaul of the networking giant, creating an “iron army” that can help it survive an American onslaught while protecting its lead in next-generation wireless.

Major structural shifts are around the corner as U.S. sanctions threaten the survival of its cash-cow smartphone business, Ren Zhengfei warned in an internal memo seen by Bloomberg News and verified by a Huawei spokeswoman. The consumer business faces a “painful long march,” Ren wrote, a possible reference to the Communist Party’s historic cross-country trek.

China’s biggest technology company is grappling with an existential threat after Washington blocked Huawei from buying American technology, cutting off vital components from Qualcomm Inc. chipsets to Google’s Android operating software. Ren, 74, said an internal revamp was now needed to meet war-time needs, meaning organizations deemed unnecessary or redundant will be removed. He didn’t provide details about how such a restructuring might unfold.

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“We have to complete an overhaul in harsh and difficult conditions, creating an invincible iron army that can help us achieve victory,” Ren wrote in the letter dated Aug. 2. “We absolutely have to complete this re-organization within three to five years.”

Ren, a former engineer with the People’s Liberation Army, has a penchant for militaristic language. The entrepreneur has spoken previously about a “strategic withdrawal” from certain markets in response to escalating U.S. scrutiny. Huawei itself hasn’t been clear about how Trump administration curbs would impact its 190,000-some employees worldwide but the company has begun to lay off U.S.-based staff, the Wall Street Journal has reported.

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