Huawei‘s founder Ren Zhengfei has been quoted to have hinted that the company is planning to move its R&D centre from the US to Canada. The company’s US R&D arm is known as Futurewei. At the start of the US sanctions, the US arm had tried to extricate itself from the parent company but that did little to help it gain the trust of the US government.

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The move will also see the Chinese tech giant manufacture some of its mobile network equipment outside China. The move is no doubt to free itself from the prying eyes of the US authorities. We recall cases of parcels being re-routed and packages getting opened while in transit from China to the US centre. The move may also be to get the Canadian government to release Huawei’s Chief financial officer and founder’s daughter Meng Wanzhou, who has been under house arrest in Canada awaiting a court decision whether she should be extradited to the US or not.

Huawei rise to fame is heavily hinged on the firm’s investment in R&D. The company invested $15.3 billion in R&D last year, making it one of the top 5 companies to invest in R&D alongside Alphabet and Samsung. Huawei’s director and dean of the Strategic Research Institute Xu Wenwei had earlier revealed that the firm currently has more than 80,000 R&D personnel worldwide, accounting for about 45% of the total workforce.

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A recent report alleged that Huawei was planning to trim down its workforce in the US. Huawei operates in the US under its subsidiary known as Futurewei. Futurewei is Huawei’s research arm and was in the news recently when it made moves to extricate itself from Huawei’s brand identity. The company has now reportedly announced worker layoffs on Monday, according to two Futurewei employees.

This sad development is coming barely two months after the U.S. government put Huawei on a trade blacklist, making it illegal for its U.S. subsidiary to transfer sensitive technologies to its parent. The blacklist also restricts Huawei from purchasing products from U.S. technology companies. One of the employees even disclosed that work came to a standstill since May 17 when the company was blacklisted. In his words; “On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect….After that basically, Futurewei has stopped doing any work – almost stopped everything.”

The layoff will see 70% of the 850 workers under Futurewei’s payroll let go, an employee revealed. The employee also indicated that the layoff list had been sent from Huawei’s headquarters in China. Apart from workers layoffs, Huawei is also terminating any open source projects, projects related to near-term Huawei products, and any research and development in critical technology.

Futurewei runs several research labs in the US and partners several US universities in research and development. Futurewei has offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas. Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office.

Huawei is yet to release an official statement about this latest development.

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Huawei‘s US research arm Futurewei seems to have kickstarted the process of severing ties with the parent company. Futurewei has reportedly banned Huawei employees from its offices, moved Futurewei employees to a new IT system and forbidden them from using the Huawei name or logo in communications. Reuters reports a Futurewei employee to have said on condition of anonymity but the employee claimed Huawei will continue to own Futurewei.

Futurewei is Huawei’s U.S.-based research and development arm. The firm employs hundreds of people at offices in Silicon Valley and the greater Seattle, Chicago and Dallas areas, according to its workers’ LinkedIn pages. Futurewei has filed more than 2,100 patents in such areas as telecommunications, 5G cellular networks, and video and camera technologies, according to data from the United States Patent and Trademark Office. Until now, Futurewei’s operations have been largely indistinguishable from Huawei and it had no separate brand or even a website, the employee said. Its staff often identified themselves as Huawei employees.

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The division of operations, which is being reported for the first time, comes as many U.S. universities have halted research partnerships with Huawei in reaction to U.S. government allegations that the company poses a national security threat. Many universities are also rethinking their partnerships with other Chinese firms. However, Futurewei is not on the “entity list” and isn’t affected by Huawei’s sanctions. This may just be Huawei’s effort to ensure the research arm doesn’t get the US sledgehammer.

Milton Frazier, Futurewei’s general counsel, declined to comment on the separation or the strategy behind it, referring questions to Huawei spokesman Chase Skinner. Skinner did not answer questions about the effort.

Huawei is among the world’s largest telecommunications equipment manufacturers. The Commerce Department in May placed the firm on its “entity list” of organizations that pose security risks. Companies on the entity list are banned from buying parts and components from American firms without U.S. government approval. The Justice Department earlier filed charges against the firm alleging theft of trade secrets and other crimes.

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