According to Forbes Russia, Chinese telecoms giant Huawei has put its Russian employees on leave for at least a month after stopping new orders in the threat of possible secondary sanctions for doing business with Moscow.
The US has cautioned China not to assist Russia in evading sanctions, threatening to expand its toolkit of secondary measures that force corporations and investors to choose between doing business with Russia and doing business with the West.
“Why should people go to the office if there are no orders?” According to an unidentified source close to Huawei,
The obligatory leave of absence comes after the Izvestia newspaper reported in late March that the corporation had blocked new supplier contracts and required some of its Moscow employees to work remotely. Forbes reported on Friday that Chinese employees continued to report to work despite the marketing personnel being eliminated.
Huawei has not responded to either story, and Forbes has not stated how many staff have been laid off. According to Huawei Technologies’ job postings, the company employs 1,200 individuals in Russia and the former Soviet Union, with 80 percent of them being locals.
In early April, Izvestia reported that Russia’s communications ministry hoped Huawei’s main competitor Ericsson would step in to keep supplies flowing. The Swedish telecom equipment manufacturer said on Monday that it was ceasing operations in Russia and placing staff on paid leave.
Huawei, which does not reveal financial or operational performance in Russia, is said to be responsible for 33 percent of networking equipment installed in the country, including base stations.
According to the Financial Times, Huawei is one of China’s largest smartphone manufactures, and its sales to Russia have decreased by at least half since President Vladimir Putin ordered the invasion of Ukraine on February 24.
According to Izvestia, Russian telecom providers expect network outages and accidents to “rise considerably” until current reserves run out in July-August.
Experts predict that Huawei will find a method to keep supplying Russia for the rest of the month. These might include utilizing third-country intermediaries — aided by Russia’s recent legalization of parallel imports — or handing over intellectual property rights to Russian firms.
According to Forbes, Huawei is likely to examine its product line in order to supply Russia with crucial telecom equipment and data storage systems that are not manufactured with US technology.
Other analysts believe that the How China launched a plethora of cyber-attacks on Ukraine days before Russian invasionUS Treasury’s exemptions from Russian restrictions on the sale of internet communication hardware, software, and services announced Friday could “embolden” Huawei.