Huawei has weathered the storm of the U.S. blacklist to come out on top. Despite restrictions on the company and its supply chain, 5G contracts have been secured and smartphone shipments continue to soar. Now the company has made is latest headline move, paying its huge staff base around the world a staggering bonus as a loyalty reward to ensure resistance to the U.S. campaign continues. There is also an additional bonus being paid to supply chain and R&D staff on the frontline. Sources inside the company told me the total cost of the bonuses could run as high as $1.5 billion, although this was later revised down to hundreds of millions of dollars–the scale and nature of which is a “total surprise.”
Huawei has already made headlines with the salaries it is willing to pay to entice talent to Shenzhen and to secure the caliber of engineers it needs to drive innovation across its product lines. “Huawei needs to win the technology and commercial battles in the future,” the company’s CEO Ren Zhengfei was quoted as saying. This latest move, though, benefits staff far and wide, with bonuses being paid to all 194,000 employees across 170 countries with a solid performance track record and no security related black marks on their records.
According to the Nikkei Asian Review, an internal email setting out the surprise but welcome news explained that “in 2019, the company and all employees were, and are, facing extraordinarily external challenges. Upon approval by the company’s president, a special dedication award will be paid.”
Anyone dealing with Huawei notes the talent that the company has brought into the organisation in recent years—and that approach has not changed over the blacklist restrictions. Western-trained engineers, marketeers, PR professionals, product designers and lawyers have joined the armies of Chinese nationals working for the firm. Like most people covering the company in the media, I have been invited to Shenzhen to see first-hand the lustrous HQ within which the tech champion has plotted its route to the top of the industry.
As I reported yesterday, the company’s scorecard looks quite extraordinary as 2019 draws to a close. Six months after the blacklist was put into effect, Apple, Samsung and others will be watching slightly helplessly as the huge Chinese market continues to rally around its leading technology company, ensuring that its balance sheet is shored up and that growth continues. Meanwhile, countries around the world continue to defy U.S. warnings to sign commercial contracts for 5G network equipment.
Ren has said that the current struggle against the U.S. pales into insignificance compared to other more personal struggles he has faced earlier in life, and his battle to build the company against stiff global competition. His critics, of course, argue that the business was built off the back of collaboration with the Chinese state, smoothing its path to the top. Either way, for tens of thousands of staff who have just spent up in China’s “Singles Day” or who are preparing for Black Friday sales elsewhere, this latest news will be very welcome.
For the Trump administration, though, it is yet another show of financial strength that sends a message of defiance and resilience. For critics of the company who believe Huawei is a genuine security threat, it gives further pause for thought as to whether—despite these concerns—the company is just too large and too well supported to fail or even to be significantly damaged by any of the actions being taken against it.
Updated later on 12 November with additional information from Huawei sources as to scale of bonus payments.