Huawei, Failing to Crack U.S. Market, Signals a Change in Tactics
SHANGHAI — For Huawei’s longstanding efforts to crack the United States market, it’s the end of an era.
Last week, the Chinese telecom giant laid off five American employees, including its top liaison to the United States government, William Plummer, according to people familiar with the matter. Mr. Plummer, who was with the company for almost eight years, became the face of Huawei’s Sisyphean efforts to win over Washington.
Bedeviled by concerns about its close relationship to the Chinese government, Huawei has spent much of the last decade lobbying to be allowed to sell its communications equipment to American telecom carriers. Mr. Plummer emerged as a highly visible representative during a series of congressional hearings in 2012, which resulted in recommendations that American firms not buy the Chinese company’s products.
On his LinkedIn account, Mr. Plummer wrote that he was “in transition.”
A Huawei spokesman said in a statement that any layoffs reflected an effort to better align its resources to support the company’s “business strategy and objectives.”
“Any changes to staffing size or structure are simply a reflection of standard business organization,” he added.
It is not clear whether there will be a replacement for Mr. Plummer, but his removal seems to indicate a change in tactics for Huawei in the United States. The company’s policy operations there are led by a relatively recent arrival, Zhang Ruijun, who took over the position nine months ago after previous postings for Huawei in Mexico and Russia.
The staffing changes in the United States are partly an acknowledgment that Huawei’s business prospects there remain challenging compared to the rest of the world. Mr. Plummer’s departure also underscores how despite years of lobbying and close communications with the American government, the company has failed to clear the political cloud around it in Washington.
Even so, the layoffs come at a difficult time for Huawei.
On Tuesday, the Federal Communications Commission will vote on whether the few small domestic carriers that use Huawei equipment will be able to continue to receive American subsidies while using the hardware. A separate law before Congress could also prevent both the United States government and its constellation of contractors from using the company’s equipment — including its smartphones, which have risen in popularity in recent years.
Like a number of other major American and Chinese tech companies, Huawei has been caught in the middle of the worsening trade standoff between China and the United States. As a paragon of Chinese high-tech prowess, Huawei’s success in selling its hardware across the world has caused it to be held up as a model by China and viewed with suspicion in Washington.
On Monday, Huawei’s Chinese rival ZTE also hit a new roadblock in Washington. The Commerce Department said it would ban the much smaller Chinese maker of communications equipment from buying American components after it made false statements to the government as part of an investigation into allegations that it violated U.S. sanctions.
Huawei is also under investigation for allegedly breaking American sanctions by conducting business with countries such as Iran and North Korea.
Huawei was left reeling earlier this year when AT&T pulled out of an agreement to sell Huawei phones, after Congress sent a letter to the Federal Communications Commission expressing misgivings about a potential deal between the two companies.
Follow Paul Mozur on Twitter: @paulmozur.