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Huawei in fight for 'survival' despite record sales

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Huawei logo is seen displayed on a phone screen in this illustration photo taken in Krakow, Poland on December 27, 2019. (Photo by Jakub Porzycki/NurPhoto via Getty Images)

The chairman of Huawei says the Chinese telecom company is in a fight for “survival”, despite record sales in 2019.

Huawei’s sales rose 18% to reach 850bn Chinese yuan (£92.7bn, $120bn) in 2019, the company said Tuesday. The jump in sales came despite the US placing Huawei on a sanctions list in May.

“Despite concerted efforts by the US government to keep us down, we've made it out the other side and continue to create value for our customers,” Eric Xu, Huawei’s rotating chairman, said in the company’s New Year’s message.

However, Xu said 2020 would be “a difficult year” and “survival will be our first priority.”

“The external environment is becoming more complicated than ever, and downward pressure on the global economy has intensified,” Xu said.

READ MORE: UK mobile operators urge government clarification over Huawei

The US ‘black listing’ means Huawei is forbidden from sourcing parts from US suppliers. Multiple governments around the world have also banned Huawei from working on 5G infrastructure, citing national security concerns. The Trump administration has repeatedly put pressure on the UK to follow suite.

“We need to keep working hard to earn the trust of our partners and local governments, improve our reputation in local markets, and keep creating greater value for our customers and society as a whole,” Xu said.

He said a company would be restructured to help deal with the competitive pressure and ensure Huawei could continue to operate around the world despite US sanctions.

“Any teams that don't contribute to enhancing the competitiveness of operating units or improving strategic support and services will be merged or downsized,” he said. “People who are made redundant during this process will be transferred to other teams to ensure focus and the company's survival.”

Xu said the US “campaign against Huawei is strategic and long-term” and called it “a matter of life-and-death.”

However, the chairman said Huawei could come through the problems stronger.

“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team,” Xu said. “It's a great opportunity for us to motivate ourselves and build up some muscle. A great opportunity for us to be more united as a team, and develop the capabilities we need to better navigate future challenges.”

READ MORE: What is Huawei? Yahoo Finance explains