Chinese Telecom Equipment Giant ZTE Starts Laying off Unspecified Number of Employees - Report

Chinese telecom equipment giant ZTE is laying off an unspecified number of people across departments and verticals, according to reports.

A China Star Market report said some departments are laying off as much as 20 percent of the employees. "Some departments of the Wireless Research Institute are laying off 10-20 per cent of their staff. In addition, the terminal business department is also the focus of the layoffs," the report said.

ZTE corporation
ZTE corporation Reuters

Even senior staff who have put in more than 10 years in the company are on the list of people being asked to move on.

"A software development engineer who has been in ZTE for more than 10 years is also on the list this time. The layoffs ratio in my department has exceeded 10 per cent and more layoffs will continue later," an employee said, according to IANS.

ZTE, along with another telecom equipment behemoth Huawei, suffered a major setback at the end of the last year when the US banned sale of hi-tech equipment to these companies. In November, Washington ordered US companies to not sell equipment to Chinese companies like Huawei, ZTE, Hikvision, Hytera, and Dahua.

The US Federal Communications Commission (FCC) announced new rules that prohibit the use of equipment and technology from these companies as they "pose an unacceptable risk to national security from being authorised for importation or sale in the US".

Tech Layoffs

ZTE's operating income from the first three quarters of last year was $13.5 billion (92.559 billion yuan). Its net profit was 6.82 billion yuan, which was up 16.52 percent year-on-year.

However, ZTE says the layoffs have nothing to do with the financials. According to an ZTE spokesperson, the current round of layoffs are a "normal personnel adjustment and reshuffle".