Ren Zhengfei and Huawei walked into the corner of history to | Titanium Media Focus

Once again, Ren Zhengfei's judgment on the cold winter of the economy has aroused heated discussion on the Internet.

At Huawei's internal forum, Ren Zhengfei mentioned in the article "The company's business policy should shift from the pursuit of scale to the pursuit of profits and cash flow" that due to the impact of the war and the reasons why the United States continues to blockade and suppress, the world's economy is unlikely to improve in the next 3 to 5 years. Coupled with the impact of the epidemic, there should be no region in the world that is the bright spot.

Based on this, Ren Zhengfei asked Huawei to change its thinking and business policy, shift from pursuing scale to pursuing profits and cash flow, and ensure that it can survive the crisis in the next three years.

For Mr. Ren, 78, it was his harshest-worded speech in recent years. Even in the Meng Wanzhou incident three years ago, Ren Zhengfei's public remarks were quite confident. He said: "The U.S. strike did not make much difference, we made a lot of preparations. But now, Ren Zhengfei believes that when Huawei is hit in 2019, it is different from today's environment.

"After the article was published, the reaction outside the society was much greater than the reaction inside the company."

A Huawei insider told the Titanium Media App that Ren Zhengfei basically has speech content published on the internal forum every week, and this article is also the content of regular meetings of the company's operating committee, but it was published. "Now on the Huawei intranet, everyone has support and opposition. The supporters believe that they need to reduce unnecessary expenses and focus on the 'food industry'; the opponents are worried about layoffs, reduced bonuses and the development prospects of their own departments. ”

Don't tell stories, live

"The breathing period for our lives is 2023 and 2024. Whether we can break through in the past two years is still uncertain. Therefore, every mouth should stop telling stories, but must talk about implementation. Tell stories to deceive companies, and the losses will be deducted from your grain parcels. First of all, we must survive, and if we survive, there is a future ”

In the article, Ren Zhengfei said that Huawei's budget in 2023 should maintain a reasonable rhythm, and the blindly invested business should shrink or close.

A Huawei employee told Titanium Media App that in terms of input-output ratio, Huawei's software development business is a typical example of income and resource investment that are not proportional.

"Huawei has invested a lot in the research and development of mobile applications such as wallets, videos, and music, but the market performance is very average." The employee said that if Ren Zhengfei's idea is followed, the development of Huawei's mobile application software will most likely be adjusted.

In terms of main business, Huawei currently has eight parts: carrier BG, enterprise BG, ICT products and solutions, terminal BG, Huawei cloud computing, digital energy, intelligent vehicle solution BU, and HiSilicon chip. Among them, operator BG, enterprise BG, ICT products and solutions are collectively referred to as ICT infrastructure services.

According to the mid-2022 report, Huawei achieved sales revenue of 301.6 billion yuan and a net profit margin of 5.0% in the first half of the year. Among them, the operator business revenue was 142.7 billion yuan, the enterprise business income was 54.7 billion yuan, and the terminal business income was 101.3 billion yuan. Judging from the data of the three main businesses, Huawei's operator and enterprise business revenue increased by 4% and 27% respectively, but the overall revenue fell by 5 points year-on-year.

Ren Zhengfei believes that ICT infrastructure is also an important breadbasket for Huawei; Huawei cloud computing should be based on supporting Huawei's business development and taking the road of supporting the industrial Internet; Digital energy should increase investment in the strategic window of opportunity, create greater value, shrink organs, and strengthen combat teams.

In the new business of intelligent car solutions, Ren Zhengfei believes that a complete front cannot be rolled out, and it is necessary to reduce the scientific research budget and focus on several key components to make competitiveness. "We must pull the edge business out of the core of the strategy." Ren Zhengfei said that Huawei should not cover the world, and it is better to open up businesses that are not good and consume huge resources than to open up and let others do it after closing.

Chill: Bonuses, benefits and uncertainty

If Ren Zhengfei's judgment of the economic winter is still at the stage of being demonstrated, then his interpretation of "cold" falls specifically on the head of every Huawei employee.

"Consolidating responsibilities, bonuses, promotions, promotions and business results will pass on the cold to everyone." ”

Ren Zhengfei said in the article that Huawei's bonuses for various businesses this year must open up the gap, never allow the average, and force everyone to achieve the short-term goal of grabbing "grain". "At the end of this year, the profit and cash flow of the business, the bonus will be more, can not create value of the business is a very low bonus, the cold air passed on." ”

Regarding Ren Zhengfei's remarks, Titanium Media App learned from Li Qing (pseudonym), an employee of Huawei's terminal business department, that the more flexible punch card system in his department in the past has been strictly implemented from the middle of this year. At the same time, in addition to the R & D department can implement flexible shifts, other departments are required to strictly implement the clock-in.

"Now, the bonus change is still one of the most concerned issues." Li Qing said that Huawei's year-end bonus is issued in May and June every year, so how the specific bonus will change can only be known until next year.

As for Ren Zhengfei's mention of "each responsibility center signs the appraisal responsibility letter, the company should target the KPI-based reciprocal reward mechanism", Li Qing said that the performance appraisal of Huawei employees is generally carried out every six months, the appraisal responsibility letter is similar to the OKR system, and then the department conducts an overall evaluation according to the completion of the business and the OKR indicators formulated by the employees themselves. Like bonuses, the KPI-based matchmaking mechanism can only wait until the end of the year to see changes.

"The change that can be perceived now is that uncertainty is increasing." Li Qing said that before Huawei CBG (consumer business, now known as "terminal BG") due to the very good cash flow, everyone wanted to transfer jobs. But now, all employees will be confused, because Huawei's various business lines are changing (the horse racing mechanism of each Huawei legion), and the future development prospects of the department are not known.

In addition to stricter employee appraisal requirements, Ren Zhengfei also said in an internal article that Huawei should focus on value market value customers and abandon the market in some countries.

In this regard, titanium media App learned from Huawei internally that huawei's terminal business has basically abandoned the market of the "Five Eyes Alliance" member countries (the United States, Canada, New Zealand, Australia, and the United Kingdom). According to public reports, the members of the "Five Eyes Alliance" have previously made a decision against Huawei to ban the use of its 5G network equipment. At the same time, due to changes in india's business environment, Huawei has also decided to withdraw from local operations.

"For Overseas Huawei employees, job benefits are also changing." Li Qing said that overseas employees have always enjoyed relatively high work subsidies and free meals in the past. Now, the free working meal is canceled and employees have to pay part of the fee.

Domestically, Huawei's outsourcing companies and regular staff have begun to lay off employees. "The percentage of layoffs is unclear." Li Qing said his department would lay off 14 of the 57 outsourced staffing. "However, some departments are also adding new employees, and the overall staff is coming in and out."

In March 2022, Guo Ping, Huawei's rotating chairman, revealed that in 2022, Huawei plans to recruit more than 10,000 fresh graduates, "only excellent talents can solve Huawei's current situation and make Huawei further develop." ”

In winter, Huawei is no stranger

For a long time, Ren Zhengfei's management of enterprises has been well known to the outside world for "thinking of danger in times of peace". According to the statistics of "Digital Intelligence Frontline", Ren Zhengfei has mentioned "winter" in his internal speeches at least 3 times before.

In March 2001, Ren Zhengfei delivered his famous internal speech "Huawei's Winter". He said, "For ten years, I have been thinking about failure every day, turning a blind eye to success, and there is no sense of honor or pride, but a sense of crisis." ”

At that time, Huawei was in a period of rapid development, with annual sales of 22 billion yuan and profits of 2.9 billion yuan, ranking first among the top 100 electronics companies in China. However, with the collapse of the NASDAQ index and the bursting of the global Internet bubble to the upstream telecommunications industry, Huawei's competitors Lucent and Nortel have successively laid off large-scale employees.

During this period, Huawei's sales from 2000 to 2003 were also stagnant due to the adjustment of the industry market until the recovery of the industry.

The second time winter was mentioned was in 2004, when the information industry was gradually transformed into a traditional industry with low gross profit margin and large scale. In the third quarter of that year, in a 13,000-word speech, Ren Zhengfei said that "Huawei should pay attention to winter." However, Huawei did not encounter major challenges since then, and has maintained double-digit revenue growth in the following years.

At the end of 2008, Ren Zhengfei mentioned "winter" for the third time. At that time, as the financial tsunami caused by the US subprime mortgage crisis spread around the world, Ren Zhengfei said that he "must be fully psychologically prepared for economic globalization and the difficulty and cruelty of market competition."

However, in 2009, with the landing of domestic 3G licenses, Huawei also ushered in an upward period of career. In 2009, Huawei's sales increased by 19% year-on-year to 149.1 billion yuan.

Now, Ren Zhengfei has once again warned of Huawei's crisis internally.

However, compared with the previous times, the situation faced by Huawei this time has undergone fundamental changes. The external environment, the global political pattern and business rules that Huawei is now facing, has changed the world; Internal management, Huawei's net profit and revenue have also been under pressure for many consecutive quarters. As Ren Zhengfei said, this time "living" has become Huawei's most important program.

Huawei and Ren Zhengfei are walking together to the corner of history.

(This article was first published on the Titanium Media App, and the author |.) Rao Xiangyu, Editor | Zhong Yi)