Huawei gutted its US research branch Monday in response to the Commerce Department blacklisting’s impact on its business. More than 600 of the 850 researchers at the controversial Chinese phonemaker‘s Futurewei subsidiary lost their jobs, the company confirmed via email.
The research unit, which has offices in California, Illinois, Texas and Washington State, recorded $510 million in operating costs last year, Huawei noted. Some of its workers reportedly knew they’d be dismissed last week.
“Decisions like this are never easy to make,” a company spokesperson said in an emailed statement. “Eligible employees will be offered severance packages, including both pay and benefits. Futurewei will continue to operate in strict compliance with US local laws and regulations.”
The US blacklisted the company in May by adding it to the “entity list” of groups deemed to be acting against national security interests. That came after President Donald Trump signed an executive order essentially banning the company based on long-term concerns that it maintained close ties with the Chinese government — which the company has consistently denied.
This blacklisting stopped US companies from selling equipment to Huawei, and Reuters noted that the designation made it illegal for Futurewei to transfer sensitive technologies to its parent in China. An Futurewei employee who kept their job told the news-gathering service that Huawei got its workers there to upload all their data to a cloud just before the ban took effect and most work ceased.
Last month, Trump promised to ease those restrictions as he tried to revive US-China trade talks. Senior administration officials confirmed that companies will be able to resume business with Huawei if they get licenses and there’s no threat to national security.
On Monday, Trump reportedly agreed to award licensing deals between US companies and Huawei in a “timely” way, after a White House meeting with tech CEOs.
First published at 2:33 a.m. PT.
Updated at 3:20 a.m. PT: Adds more detail and background.