Chinese tech firm Huawei is planning to cut people off its payroll specifically its subsidiary company based in US. Previously, the US government has banned Huawei products due to supposedly being a security threat. This US subsidiary is located in three states across the US.

The Futurewei R&D in the US is the target of this upcoming layoff, according to The Wall Street Journal. The subsidiary has 850 employees coming from Texas, California, and Washington. The foreseen layoffs in this company are in “hundreds” according to inside sources.

Some of these workers already feel that they’re going to be cut off the company soon. Meanwhile, Chinese workers on this site can return to work for the main Huawei company if they like to. Huawei has yet to comment on this layoff.

The layoff could have been caused due to the reduced productivity of this subsidiary as of the recent ruling against Huawei. The US government has recently banned the company from selling their devices in the US due to an executive order signed by President Donald Trump himself. Not only is Huawei banned from selling devices but other US companies also cannot sell equipment to them.

With Huawei’s actions limited, the point of having the US-based subsidiary makes less sense in their business. However, President Donald Trump has promised to be in talks soon to ease these restrictions against Huawei.

As of now, Huawei is not in a bad spot as they’re still second best smartphone manufacturer behind Samsung. However, the loss of customers in the US would be a large hit to their sales as the region is one of the largest markets for technology and gadgets.

Huawei is also cooking up some new technology such as the foldable Mate X. The company is toe-to-toe with Samsung in terms of progress with the device since the race started. However, Huawei also took their time to improve their own device after Samsung pulled their own device back. Up until the final verdict against the Huawei ban is decided, planning own any new Huawei device in the US could potentially be unlikely.

Huawei Mate 20
The next Apple 11 is said to have a triple-lens camera like the Huawei Mate 20. Pictured: Pedestrians walk past a poster advertising Huawei's Mate 20 smartphone in Beijing on December 28, 2018. - Chinese telecoms giant Huawei expects to see a 21 percent rise in revenue for 2018, its chairman said on December 27, despite a year of 'unfair treatment' which saw its products banned in several countries over security concerns. AFP/Getty Images/Wang Zhao