Huawei behaved uncorporately – Newspaper Kommersant No. 235 (7436) of 12/19/2022

According to Kommersant, the Chinese electronics manufacturer Huawei is closing a division of corporate sales of data storage systems and telecommunications equipment in the Russian Federation. It employed about 2,000 people who were asked to transfer to the CIS countries or quit. But the supplier retains centers for the development of promising technologies in Russia. Supplies of Huawei equipment will continue through parallel imports, market participants believe, and distributors who will hire laid-off specialists will take over technical support.

A Kommersant source in the market said that from January 1, Huawei is closing the Enterprise Business Group division, which was responsible for supplying solutions in the field of information and communication technologies (ICT, data storage systems, telecommunications equipment, etc.) for corporate clients. According to him, some of the employees received offers to transfer to the CIS countries, while others will be fired. The interlocutor of Kommersant, close to the company, confirms that most of the employees are leaving the unit, but the office will remain nominally: “The company is ready to return if active hostilities in Ukraine stop.” In total, about 2 thousand people were engaged in sales of ICT solutions in the Russian Federation, says a Kommersant source.

Huawei’s sales offices, including the Enterprise Business Group, are located in Moscow, according to the company’s official page on the HeadHunter website. According to the interlocutor of Kommersant, Huawei retains research and development centers in the Russian Federation (R & D, located in Moscow, St. Petersburg, Nizhny Novgorod and Novosibirsk; they are developing technologies for the 5G communication standard, speech processing and generation technology, computer vision, augmented and virtual reality, machine learning, etc.). In November, Vedomosti reported that Huawei was dividing Enterprise into the CIS countries and the Russian Federation.

Huawei’s decision is associated with the risks of secondary sanctions, as the equipment can be used in the public sector, according to a source in the telecommunications market. According to him, products imported through parallel imports may have a limitation in the operation of software for the region, so Huawei’s presence in the ICT solutions market “will be gradually reduced.” A Kommersant source specified that the company retains the business of selling consumer electronics (smartphones, laptops, etc.) and AppGallery mobile services in the Russian Federation. Huawei declined to comment.

After the outbreak of hostilities in Ukraine, most of the major providers of ICT solutions officially stopped sales in the Russian Federation. Among them are Dell, HP, Hitachi, etc. Huawei’s management did not make any statements, but the supply was also frozen. As a result, at the end of the year, sales in the Russian storage market sank by 30–50%, while prices increased by 50% (see Kommersant dated December 12).

The disbandment of Huawei’s corporate sales and support office will make it more difficult to buy equipment, since “parallel imports cannot provide the necessary speed and assortment,” says Pavel Voronin, MTS First Vice President for Technology. However, he notes that Huawei equipment continues to work in the Russian Federation, and domestic companies can take care of support: “In any case, there are already projects to switch to domestic equipment.”

There will be no problems with technical support, the market has “adapted to the situation,” says Maxim Koposov, director of Promobit: “Equipment support is provided by distributors who hired their employees when foreign companies left.”

Timofey Kornev, Yulia Silence