ZTE ‘to cut 3,000 staff’ – reports

By:
Alan Burkitt-Gray
Published on:

Handset division hit hardest as ZTE to cut 3,000 staff including people who have applied for jobs with Huawei, says Reuters

Unconfirmed reports say ZTE is cutting about 5% of its workforce, including 10% of the staff of its handset division.

The Reuters news agency said that the company will cut 3,000 of its 60,000 global workforce, including 600 people out of the 6,000 who work in its handset division worldwide.

The handset division in China itself will be worst affected, said the news agency, quoting an unnamed person in ZTE who said the number within the country would be “beyond 20%”.

Global Telecoms Business has asked ZTE to comment on the report, which said that the cuts are due to be made during the first quarter of 2017, but has not so far heard back.

The news comes less than two weeks after rival Chinese equipment vendor Huawei said that it expected to report revenue growth of 32% for 2016 – though this will be down on the 2015 figure of 35%.

Another unidentified ZTE executive – said by Reuters to be outside China – told the agency that staff who had applied for jobs with Huawei should be fired because they were “unstable factors”.

ZTE chairman Zhao Xianming, the former CTO who was appointed to his position in the wake of last year’s scandal over exports to Iran, warned staff in a New Year message that “businesses that don’t fit our strategic direction or with low output performance will be shut, suspended, merged or reconfigured”, according to the Reuters report.

In March 2016 the US Department of Commerce revealed documents that showed ZTE had set up front companies to export technology goods, including hardware and software sourced from US suppliers, to Iran. Zhao called this the “biggest crisis in [ZTE’s] 31 year history”, said Reuters.

Last November Zhao appointed the company’s first-ever chief export compliance officer.