Huawei anticipates many layoffs in the United States.

The layoffs are expected to affect the workers of Futurewei Technologies, a US-based research and development subsidiary based in Huawei, according to these people. The unit employs approximately 850 people in research labs in the United States, including Texas, California, and Washington State.

Huawei refused to comment. The exact number of layoffs could not be determined, but one of the people said that they should be in the hundreds. Some of Huawei's Chinese employees in the United States had the opportunity to go home and stay at the company, another person said.

Futurewei employees have faced communication restrictions with their Huawei home office colleagues in China following the May 16 Commerce Department's decision to register Huawei on its so-called list. # 39; entities. people.

Several employees have already been informed of their dismissal, while further planned reductions could be announced soon, said these people.

The blacklist has limited Huawei's ability to purchase critical US hardware and software for its products, including smartphones and popular cellular base stations outside the United States. Huawei bought $ 11 billion worth of US technology last year.

Last month, President Trump said at the Group of 20 summit in Osaka, Japan, that he would allow the resumption of some technology exports to society. Beijing considers easing restrictions on Huawei as a prerequisite for any trade deal with Washington.

US Secretary of Commerce Wilbur Ross said on Tuesday that the United States would start issuing export licenses to Huawei's suppliers whose sales to Chinese society did not endanger national security. In the meantime, Treasury Secretary Steven Mnuchin has urged US suppliers to apply for licenses.

In the United States, Huawei gears pose a security risk because the giant telecommunications company has no choice but to comply with the Chinese authoritarian government's demands for cyber espionage on its behalf. Huawei says that it is an independent company with no connection to the government and has challenged US officials to provide evidence of espionage.

Huawei is the world's largest manufacturer of telecommunications equipment and the second largest supplier of smartphones

Apple
Inc.

and behind only

Samsung Electronics
Co.

But despite its dominant position in many markets, the company is effectively unable to sell its equipment to major US carriers, following a report released by the US Congress in 2012 that said it could risk to safety. Huawei denied this.

In the United States, some 1,500 Huawei employees are primarily selling equipment to mobile operators across the country, while others are researching a range of technologies at Futurewei. Huawei employs more than 180,000 people worldwide.

But Commerce's list of May 16 entities has complicated Futurewei's ability to continue working with its home-based offices in China, because Futurewei's R & D efforts could be summed up in a US-based technology derived from the list of Huawei entities, said these people.

According to the rules of the list, "any unlicensed transfer of technology of any kind by anyone from the United States to Huawei is prohibited," said Kevin Wolf, associate of the law firm Akin Gump, a government official. Department of Commerce under the Obama administration.

In addition to the US blacklist, Huawei also challenges two US charges for intellectual property theft and violation of US sanctions imposed on Iran. At the same time, US authorities lobbied allies around the world to prevent Huawei from participating in setting up their 5G network. This effort has had mixed success.

Analysts believe that the list of entities is the most serious threat to Huawei, given its dependence on US chips and other technologies. Huawei founder Ren Zhengfei said last month that this measure would cost Huawei $ 30 billion in lost revenue this year and next year. And the company's international smartphone sales dropped 40% in the month following the blacklist announcement, although the decline has moderated since. According to its annual report, Huawei generated more than $ 100 billion in sales last year.

On Friday, Huawei President Howard Liang told a news conference at the company's headquarters in Shenzhen that Trump's promise to lift export restrictions was not yet beneficial. said the Chinese firm should be removed from the list of entities.

Huawei smartphones operate under the Android operating system of Google and, among other restrictions, the list of entities prevents Google from granting a license to use the software on future models of Huawei phones. Although Huawei is working on its own alternative operating system, called Hongmeng, Mr. Ren said in a recent interview with a French newspaper that it was originally designed for telecommunication networks. He said that "we do not yet have a clear plan for development". a software ecosystem around the operating system.

-Asa Fitch and Eli Binder contributed to this article.

Write to Dan Strumpf at [email protected]