Huawei founder and CEO Ren Zhengfei (pictured) plotted a major restructure of the business intended to stave off the threat of US sanctions on its supply chain and production, Bloomberg reported.

Citing an internal memo, the news agency said Ren’s plan involved a wide-reaching shake-up of all Huawei businesses, but with a specific focus on its smartphone unit which faces a potential shortfall in components and software due to a US trade ban.

The document showed Ren wants urgent action, stating the restructure must happen within the next three-to-five years and create an “iron army” to tackle the US threat, Bloomberg reported. Huawei’s consumer business, in particular, faced a long “painful” journey, he said.

Although the US subsequently eased restrictions around shipping components and software to Huawei, the threatened action had already spurred the Chinese vendor into action, culminating in the unveiling of in-house operating system HarmonyOS late last week. However, Ren cautioned it would take time to build an app ecosystem around the new platform, which could limit its ability to replace Android in the short term.

The US is also on the brink of implementing a block on government agencies purchasing Huawei equipment mandated in a defence spending bill adopted in August 2018.

Soldier on
Although the US campaign against Huawei is yet to have a major financial impact, revenue increased 23 per cent year-on-year to CNY401.3 billion ($56.9 billion) in H1, Ren previously warned the blocks would take around $30 billion off its top-line over the next two years and result in a $100 billion reduction in 2019 revenue.

The executive said shots fired by the US at Huawei’s smartphone business “unfortunately hit the oil tanks”, Bloomberg reported, suggesting a strong showing by the vendor in the second quarter could peter out over the coming months.

Still, Ren remained confident in Huawei’s long-term survival, reiterating that the US would ultimately lose out by not using the vendor’s 5G technology, Bloomberg stated.