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HUAWEI rotating chairman says survival is 'first priority' in 2020

HUAWEI was able to grow its business in 2019, but it might not have this luxury in 2020.

Published onDecember 31, 2019

HUAWEI Mate 30 Pro Macro rear camera housing

Huawei has endured a challenging 2019 following the US trade ban against the company in May. The firm still managed to deliver year-on-year growth, but the brand expects an even tougher year in 2020.

In fact, rotating chairman Eric Xu has issued a New Year’s message to employees today, saying it will continue to remain on the US Entity List in 2020. The executive adds that HUAWEI won’t grow as quickly as it did in the first half of 2019, when it enjoyed plenty of sales momentum (and 18% year-on-year growth in sales revenue).

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“Survival will be our first priority. To this end, we need to remain dedicated, always put our customers first, and keep creating value,” Xu explained. “Specifically, we will focus on the following four areas: sustaining growth, improving our capabilities, optimizing our organization, and controlling risks.”

The fact that HUAWEI is talking about survival shows just how seriously it’s taking 2020 — and for good reason. Huawei’s P30 series and several other devices gained Google certification in the first half of 2019, allowing the company to maintain sales even when the flagship Mate 30 series was denied this certification in September.

But HUAWEI might not be able to rely on older certified devices to keep sales up in 2020, especially with its P40 series tipped to arrive without Google support. To this end, the HUAWEI executive explains that it’ll be relying on HUAWEI Mobile Services (HMS) to sell smartphones outside China. But how exactly does one replace Google Maps, YouTube, and other Google services?

HUAWEI to trim the fat

HUAWEI CES 2019 booth Logo

The rotating chairman noted that HUAWEI will remove “mediocre” managers more quickly in 2020. Examples given of people to be chopped include: those who lost their “enterprising spirit,” those who gained their positions due to personal connections, employees who focus on short-term gains at the expense of long-term success, and people who pass problems on to their successors.

HUAWEI says some of its Google replacement apps will be ready by end of year
HUAWEI Mate 30 Pro App drawer

“We need to more actively plan out our managerial pipeline. Every year, managers performing in the bottom 10% will be removed,” Xu elaborates. It’s unclear whether this measure is a new one or if it’s only been made public now.

Nevertheless, these statements all come together to paint a picture of a company tightening its belt in the face of a worsening financial and political situation. HUAWEI clearly expects to shed employees and see flat (if not disappointing) financial results in 2020.

Do you think HUAWEI will be able to grow its smartphone business in 2020? Give us your thoughts below.

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