Huawei closes corporate division in Russia

In a nutshell: Chinese tech giant Huawei is closing its corporate business unit in Russia over fears that the company, already under heavy sanctions, could face secondary sanctions for allowing the state to use its systems and equipment.

According to the Russian newspaper Vedomosti, the division that sells data storage systems and telecommunications equipment to corporate clients will be disbanded on January 1. SCMP writes that about 2,000 employees will be asked to be transferred to Huawei offices in other countries of the Commonwealth of Independent States (CIS) or fired.

The report says Huawei will keep the business unit’s offices in Moscow as it stands ready to return if “active fighting” in Ukraine stops. The company’s research and development centers in Moscow, St. Petersburg, Nizhny Novgorod and Novosibirsk will not be affected and will continue to work on projects such as 5G, computer vision and virtual reality.

Huawei, of course, was listed by the Donald Trump administration as a Bureau of Industry and Security (BIS) entity in May 2019, preventing it from accessing American-made technology or dealing with companies that use American tools or designs, including TSMC. . It can’t even ship phones preloaded with Android or Google’s suite of apps. Thus, the revenue of the consumer division of the company, engaged in the production of smartphones, fell by 25% year on year.

In an attempt to avoid even more sanctions, Huawei reportedly laid off some local employees in Russia and suspended new contracts with operators in April following the country’s invasion of Ukraine. From 2023, the company also separates its corporate division in Russia and Belarus from other CIS countries. In September, the company reportedly moved some employees from Russia to Kazakhstan and Uzbekistan.

Back in March, China said it opposed “illegal” US and allied sanctions against Russia. Some Chinese companies operating in the country have been hit by sanctions, and drone maker DJI Technology Co has become the first Chinese firm to suspend sales in Russia (and Ukraine) in a move it says was meant to prevent its drones from being used in combat.

As for other news from Russia, today we heard that the country cannot get its domestically developed processors from foreign factories. This is especially bad news as China has banned the export of its Longsoon processors to the country.

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