SANTA CLARA, Calif., July 22 (Reuters) - The U.S.-based research arm of China's Huawei Technologies Co Ltd - Futurewei Technologies Inc - announced worker layoffs on Monday, according to two Futurewei employees.
The layoffs come about 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.
Futurewei was set up in part to work closely with U.S. universities and researchers.
One employee said the layoff target was to remove 70% of the 850 Futurewei workers. That employee said a layoff list had been sent from Huawei's headquarters in China, and aimed to eliminate any open source projects, projects related to near-term Huawei products, and any research and development in critical technology.
A second Futurewei employee confirmed layoffs were happening Monday but declined to provide details.
Huawei declined to comment.
Huawei is among the world's largest telecommunications equipment manufacturers. The U.S. Commerce Department in May placed the firm on its “entity list" of organizations that pose security risks. The Justice Department earlier filed charges against the firm alleging theft of trade secrets and other crimes.
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.
The Wall Street Journal reported earlier this month that layoffs were being planned.
The first Futurewei employee said work had come to a standstill since Huawei was blacklisted.
"On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect," that employee said. "After that basically Futurewei has stopped doing any work - almost stopped everything." (Reporting by Jane Lanhee Lee Editing by Bill Trott)