EXCLUSIVE:Huawei Australia Business “Devastated” By Bans, Sackings Loom Says Insider
Senior Huewei management in Australia have confirmed that consumer sales of smartphones which include their P30 and P20 models are down over 48% and that the local operation is facing job cuts and a massive reduction in the sale of Huawei consumer products.
The executive who we are not naming has worked for Huawei for several years, said that the move by the US administration to ban Huawei will have a major impact locally “absolutely it will” he said when asked.
It’s also been revealed that after being banned by the Australian Federal Government from supplying 5G networking gear that the local subsidiaries Enterprise Networking division has “18 months of work left under contract to supply 4G equipment” to carriers they said.
This is when Optus who has a major slice of 5G spectrum and Telstra are expected to have rolled out a major share of their 5G network in metropolitan areas.
When questioned about Huawei’s consumer business in Australia which underwent a major shakeup 12 months ago with senior business executives hired locally and senior management shipped in from overseas. the executive who spoke openly said that the business had only recently got “traction” and that several million dollars invested in marketing, the wining and dining of Australian media, who were flown around the world and to Northern Australia for the P30 and Huawei P20 launches “would now be lost” as sales slump.
ChannelNews has been told that carriers and consumer electronic retailers who have been ranging Huawei smartphones have told Huawei to take their products back which they have to do as part of their supply contracts.
Earlier this year Huewei claimed that they were investing $6M dollars in digital, TV and outdoor poster marketing for their new P30 smartphone ChannelNews undersatands that the bulk of this has aleady been spent.
The executive admitted that the combination of the ban by the Australian Federal Government on the roll out of Huawei equipment inside carriers 5G operations and the US government ban on Huawei getting access to US technology and software in particular the Google Android Operating System was now having a “serious impact” on the Companies local operation.
“We have only recently started to drive our consumer business in Australia. This was the first year that you could say, that we were really driving the business with a major investment of capital, good products and strong marketing” they said.
“This ban has come at a terrible time for Huawei”.
“We were starting to take market share, this was because of the investment we were making, in train billboard marketing and digital, the P30 was delivering for us. This was a great device that we backed into the market and now this has come to an abrupt end”.
“It’s devastating” they added.
The executive said that “pressure” was now being felt in both the consumer and networking side of Huawei’s local operation”.
ChannelNews has been told by a separate Huawei executive that up to 40% of 700 employees that Huewei employs in Australia could be cut from the Huawei Australia operation due in part to global cost cutting.
When asked what future there was for Huewei in Australia he said, “We still have a strong 4G network rollout to deliver at least for the next 18 months”.
“We are still rolling out 4G and some 3G for carriers and as for the consumer business we will have to wait till the 90 days are up to know what the future is” for Huawei and the local operation he said.
The reference to the 90 days refers to a decision by Google that they will continue to work with Huawei for the next 90 days.
Google’s decision comes after the U.S. Commerce Department granted a 90-day licence on Monday May 21st, 2019 for any tech companies that need to work with Huawei to ensure customers have access to apps and security updates.
Huawei is still banned from buying hardware from companies like Intel, Broadcom, and Qualcomm, which have all stopped supplying Huawei.
On Monday, billionaire Huawei founder Ren Zhengfei confirmed the company had endured about a 40% drop in smartphone shipments abroad, which a company spokesman said referred to a fall over the past month.
Ren expects Washington’s sanctions to curtail its overall revenue by about $30 billion over the coming two years, wiping out the networking giant’s growth. Ren was surprised at the extent to which Washington attacked his corporation, but Huawei will maintain its research budget while refraining from layoffs or major asset sales, he added.