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The letter from the Huawei founder to the employees caused a stir

The letter from the Huawei founder to the employees caused a stir

The letter from the Huawei founder to the employees caused a stir

An internal message from Huawei founder Ren Zhengfei about future predictions has also leaked on Chinese social networks.

“The next 10 years will be a painful period in history, the global economy will go into recession… Huawei should reject overly optimistic forecasts and make survival an important goal. Best of the next three years,” Nam said Chinpee. . In a letter to staff this week.

follow up SCMPthe content of the letter will attract a lot of attention and provide a topic for discussion in all social networks. Weibo mail and related information became the top search topic on the charts.

Nham Chinh Phi, co-founder of Huawei.  Photo: Reuters

Nham Chinh Phi, co-founder of Huawei. See: Reuters

Sinai Once Mr. Ren’s content was shared overseas, China’s stock market collapsed, he said. “The views of the Huawei founder not only warn of a bleak future for the technology industry, but also affect the entire economic sector in the future. That’s why the content of the article immediately caused a stir.” This page has been commented on. Some experts say that when a giant like Huawei steps up, the problem is very serious.

Mr. Ren believes this period will be “more dangerous” than 2000. Huawei Winter. The company must make survival its primary goal, limit its business model and reduce unnecessary things. Employees should be particularly alert to future problems.

The four main points he specifically pointed out were:

First, the next ten years will be a very painful historical period, the world economy will continue to shrink, the world economy will not improve in the next 3-5 years. Due to the impact of the pandemic and other issues, global consumption capacity has been significantly reduced. This will put direct pressure on Huawei in 2023-2025, both in supply and in the market. Huawei leads by survival.

Second, Huawei’s 2023 budget should maintain a reasonable pace, reduce or close stores that cannot create value and profit in the next few years, and adjust the market structure.

Third, Huawei should simplify employee positions, performance reviews, corporate finance and inventory. One of the main points is to encourage people to compete for the company’s survival and revenue. The company should maintain proper inventory control to ensure minimal cash flow and avoid another crisis.

Fourth, cutting jobs does not mean cutting research and development. Huawei used to focus on R&D rather than service, but now they need to improve their service department. If it’s left, the company must invest at all costs, but it can’t spend money to wind it up.

This is not the first time Mr. Nam Chin Pee has spoken out to remind his employees of the dangerous situation the company is facing. In the two years before the US imposed sanctions on the company, he paid particular attention to the company’s survival goals. However, these warnings have halted much activity as China continues with its no-Covid policy. Huawei’s revenue fell 5.9% in the first half of 2022 compared to the same period in 2021. Profit margin fell to 5% year-over-year.

Evan Lam, a senior analyst at Counterpoint Research, said the Huawei founder’s message offered a realistic view of the economy and a sound business strategy that showed rare honesty.

“It’s rare for companies to respond directly to people’s expectations. An influential person like Mr. Nam broke the silence,” said Ivan Lam.

Mr. Ren isn’t the only tech leader to speak openly about the current predicament. Tencent Holdings founder Pony Ma Huateng recently launched a series of live chats on social media about the challenges facing China’s tech industry in a zero-Covid environment.

Meanwhile, Xiaomi co-founder Lei Jun delivered an impressive speech at the new product launch event in early August. It speaks to a growing effort to encourage people to persevere in the face of future challenges.

Wang Xing, founder of online delivery service platform Meituan, cited an old poem that analysts saw as a protest against the country’s shrinking tech sector.

Kung Nha (Consequences Sinai, SCMP)

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