Forging ahead and overcoming obstacles to ensure sustainable survival

• In his New Year message, Huawei Rotating Chairman Eric Xu says the company exited crisis mode in 2022 and is focused on overcoming obstacles to ensure sustainable survival.

By: Eric Xu, Rotating Chairman of Huawei

In 2022, we exited crisis mode. US restrictions are now our new normal, and it’s back to business as usual. Last year, everyone on the Huawei team worked hard to overcome obstacles and improve the quality of our operations. Based on our forecasts, we expect to close the year with total revenue of CNY636.9 billion (US$91 billion).

This year, our information and communications technology (ICT) infrastructure business maintained steady growth, and the decline in our devices business slowed. We achieved rapid growth in digital power and Huawei Cloud, and took the competitiveness and user experience of our intelligent automotive components to the next level.

Pine trees show their resilience in the depths of winter, as do the bonds that unite us. Huawei could not have made it through such extreme difficulties without the tremendous trust and support of our customers and partners. For this, we are eternally grateful.

We are also very proud of the Huawei team: we have been able to stay afloat because, together, we have overcome adversity. This applies in particular to our frontline staff outside China, who have kept serving our customers despite the adverse effects of COVID-19 and external restrictions. And of course, we wouldn’t be where we are without the unwavering support of our families and loved ones. They are our pillars, and we are lucky to have them by our side.

On behalf of the company, I would like to express our sincere gratitude to all of you.

The macroeconomic environment may be fraught with uncertainty, but what we can be sure of is that digitalisation and decarbonisation are the way forward, and that is where future opportunities lie. In the face of external volatility, we must stay focused and true to our vision and mission. We must redouble our commitment to laying the foundations of the digital economy and driving green, sustainable development. In this way, we can create more value for our customers, partners and society as a whole.

2023 will be our first year back to business as usual, with the external restrictions still in place. It will be a crucial year for us, so we need to actively drive progress, keep inspiring passion across the organisation and further hone our capabilities. We need to be proactive in improving the business environment and managing risk more effectively. Only then can we achieve our business goals for 2023 and lay a solid foundation for Huawei’s continued survival and development. Specifically, we must do the following:

1. Maintain strong investment in research and development (R&D). We need to make our products and solutions more competitive through innovation, architectural restructuring and systems engineering design. We must fully commit to forward-looking basic research and open innovation, and focus our limited resources on areas that create value. We must also maintain open collaboration across the value chain to ensure the continuity and resilience of our supply.

2. Win through quality. External restrictions are now a fact of life, so it is more important than ever that we make Huawei synonymous with high quality in the ICT sector and win through quality. To continuously create value for customers, we need to improve total quality management based on ISO 9000 standards and implement a strategy-driven quality management system that involves everyone and covers the entire value chain, in line with our customers’ needs. We also need to extend our quality management mechanisms and requirements to every segment of the supply chain we have restructured in recent years. We need to invest more and improve quality together with our suppliers to deliver high quality to our customers.

3. Commit to making progress and seize opportunities to thrive. Huawei’s strength lies in our diverse business portfolio and strong business resilience, and we must leverage it to achieve high-quality growth. In the ICT infrastructure business, we need to be proactive in uncovering digital opportunities across industries to drive effective growth. Huawei Cloud must become the foundation (and enabler) of digital transformation both for the company itself and for vertical industries. In digital power, we need to invest boldly in strategic opportunities, make our products more competitive and effectively manage the uncertainty of bulk raw material supply worldwide. In our devices business, every domain must put the product at the heart of everything it does and concentrate resources on building best-in-class products that truly stand out. They must fulfil their operational responsibilities and strive to increase their input-output ratio. Our Intelligent Automotive Solution business unit (BU) must focus on key components and scale up product commercialisation to ensure business success.

All our business domains need to optimise resource allocation, cascade and enforce accountability for business performance, and improve key capabilities in operations management. All business domains must also follow corporate guidelines to distribute bonuses based on contribution and widen bonus differences, which will encourage all operating units to create more value.

4. Press ahead with transformation to inject vitality into the organisation and motivate everyone to keep moving forward. We will continue with our contract reviews and closures in the transformation of representative offices, and expand the pilot of our integrated business transformation for representative offices. These programmes will help unleash the operational capacity of our field offices and foster greater autonomy. In leadership management, as we work to optimise policy, we will keep implementing the term-based appointment system and set essential requirements for three types of experience: field experience and entry-level experience for everyone, and overseas experience for key positions. The goal is to build a more dynamic management team and inspire both managers and professionals to keep moving forward. In addition, we will continue to expand the scope of specialised teams, optimise relevant policies and ensure team stability.

Looking after local teams is crucial to our long-term survival and development in local markets outside China, so we need to actively develop and manage our local workforce. As for competence and qualification (C&Q), we will pilot independent C&Q assessments, refine C&Q criteria and use C&Q to drive self-learning and capability improvement. Heroes can emerge from anywhere, and there are experts in every trade. We hope to see a great many talented people emerge, give their best in the roles that suit them most and make outstanding contributions.

Over the past three decades, Huawei has worked with operators around the world to build leading communications networks. Over the past ten years, we have increased investment in cloud computing, putting Huawei Cloud in a better position to become the foundation and enabler of the digital world. In the coming decade, together with our ecosystem partners, Huawei will build industrial internet platforms and cutting-edge solutions so that industries can go digital, become intelligent and cut carbon emissions. We will do everything we can to bring digital to every person, vehicle, home and organisation, bringing our vision of an intelligent world within reach.

Fire is the test of gold; adversity is the cornerstone of strength. Ghanim Al-Muftah, ambassador of the FIFA World Cup 2022, who was born without the lower half of his body, is a testament to how unforgiving – yet glorious – life can be. As long as we hold on to our ideals, nothing can weigh us down. The future is full of hope, and this is what drives us forward. The problems we face will only add value and meaning to the journey.

2023 will be an extraordinary year. Let’s forge ahead and overcome whatever obstacles come our way. Let’s strive for long-term, sustainable survival.

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About Huawei

Founded in 1987, Huawei is a leading global provider of information and communications technology (ICT) infrastructure and smart devices. We have approximately 197,000 employees and operate in over 170 countries and regions, serving more than three billion people around the world.

Our vision and mission is to bring digital to every person, home and organisation for a fully connected, intelligent world. To this end, we will drive ubiquitous connectivity and promote equal access to networks; bring cloud and artificial intelligence to all four corners of the earth to provide superior computing power where you need it, when you need it; build digital platforms to help all industries and organisations become more agile, efficient and dynamic; and redefine user experience with AI, making it more personalised for people in all aspects of their life, whether they’re at home, in the office or on the go.

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