‘Wolf culture’ and ‘Rommel’ loom large at Huawei
The 5G telecom giant has been accused by former employees of treating staff as ‘raw material’
A major investigation into Huawei has revealed a “wolf culture” in Europe obsessed with “military metaphors.”
The highly-controversial Chinese company is now one of the most dominant tech groups in the world with a massive infrastructure portfolio and a booming consumer product division.
But behind the scenes, the 5G telecom giant has been accused by former employees of treating staff as “raw material” in its quest to rule the global technology landscape.
Below are excerpts from an in-depth report, painstakingly researched by Daniel Laufer and Alexander Fanta of netzpolitik.org and media partners of The Signals Network.
The background into Huawei’s operation
“Insight into the inner workings of the controversial Chinese mobile phone company is rare. Huawei has about 200,000 employees worldwide, and about 2,400 in Germany, according to the company. The European headquarters are in Dusseldorf. A sign in the entrance area reads, ‘We Are A Top Employer!’ Beneath it, orchids decorate the reception table. In the corridor hangs a photo of a hiking group posing and waving on a mountain peak.
“But insiders paint another, darker picture that belies the impression of a friendly atmosphere. They talked about a technology company that sees its employees as raw materials from which to forge its own success.
“Chinese employees [are moved] around like chess pieces. [Staff is] fired at will [while] a quasi-military esprit de corps prevails. In Germany, the company sometimes violates the spirit, perhaps even the letter, of [the] labor law.
“We have spoken to people who have worked for the company in several European countries. Our sources come from China, as well as from Germany, [and] they worked for different subsidiaries and departments. Some ex-employees speak well of the corporation, while [others] interviewed make serious accusations.”
‘Wolf culture’ and its effects on Huawei staff
“Those interviewed paint a picture of a company that is celebrated in public for its seemingly modern management philosophy, but at the same time pushes employees to their limits. Ex-employees speak of a toxic corporate culture that is promoted by the company’s management. The enormous pressure to succeed also plays a role.
“Those who play along with this are rewarded by Huawei with special payments linked to company shares. But what happens when workers refuse to put their lives entirely at the service of their employer is shown by internal emails and covert audio recordings obtained by netzpolitik.org and its media partners, as well as court cases in several countries.
“[Yet] anyone who listens carefully to Huawei’s founder Ren Zhengfei and pays attention to his uncompromising, war-like rhetoric will notice that Huawei makes no secret of its true corporate culture. Ren peppers his speeches with military metaphors and proudly calls his rough style of leadership ‘wolf culture.’ In Europe, too, ‘wolf culture’ reigns.”
‘Heroes are born … and Rommel’
“The illustration of a brochure that the corporation distributed to its employees said a lot about how it seems to see them. As if human beings were raw materials that could be processed in a factory into the perfect soldier. One picture shows a shot-up Russian fighter plane from World War II that nevertheless continued to fly, as Huawei pointed out in the accompanying text. The caption reads, ‘Heroes are forged, not born.’
“Obviously, the company is trying to inculcate its employees with this fiery management rhetoric. Former employees from Europe that were interviewed said they found it strange. Nevertheless, it is apparently practiced in the company. Huawei offers an atmosphere of high pressure, but little support or positive feedback, our sources said.
“The company claims that the motif with the fighter plane has ‘nothing to do with everyday work at Huawei.’ But the graphic could also be seen in an email that was obtained by netzpolitik.org and its media partners. The human resources department of the European headquarters sent it to employees via a distribution list as early as August 2019.
“The email contained a speech allegedly given by Ren at a swearing-in ceremony for employees. According to the speech, [he] said that Huawei needed to improve the skills of its ‘warhead teams’ that were closest to customers. He spoke about a ‘sound of artillery’ that employees in the field could hear. They should form ‘regional field armies.’
“The military metaphors are deeply embedded in the group’s DNA. For almost a decade, Ren worked as an engineer for the Chinese People’s Liberation Army. When he founded Huawei in 1987, the company initially supplied the military.
“Even in everyday life, according to our sources, executives at Huawei talk[ed] about ‘generals’ and ‘battles at the ‘front.’ In an e-mail to employees at the European headquarters, Huawei is said to have referred at least once to the World War II German Field Marshall Erwin Rommel as a source of inspiration. Until recently, there was also a Chinese-language entry on Huawei’s website praising Rommel as an ‘invincible’ commander in North Africa.
“[But] a company spokesperson said that, as a matter of principle, there were no positive references to Nazi Germany at Huawei. [Yet] the bellicose rhetoric and the questionable figure of reference not only fit into the company’s world view, but they are also a core element of its thinking. Ren sees economic competition as a constant ‘struggle for survival,’ writes Eric Flamholtz, of the University of California, who studied Huawei. Accordingly, Ren sees corporate culture as the ‘ultimate weapon.’”
Top jobs and ‘sea turtles’
“Not everyone is equal in Huawei’s hierarchy. Metaphorically speaking, the company has two floors and employees without Chinese roots can occupy only the lower floor – no matter where they are on the official organization chart. The top-level is reserved for ex-pats, Chinese who are sent from the company’s headquarters in Shenzhen to subsidiaries all over the world.
“One ex-employee says there is effectively a glass ceiling for European workers: ‘When you walk through the corridors, it is very obvious that 99.9% of the management is Chinese.’ That is probably an exaggeration, but it has a core of truth.
“Chinese dominance is reflected in the management level of the global group, which operates in 170 countries around the world. Of the 17 members of Huawei’s board of directors, 17 are Chinese. The head of Huawei Germany is also Chinese, flanked by a German as Chief Technical Officer. Management positions held by locals appear to be little more than window dressing. ‘Every German manager had a shadow manager from China standing behind him,’ said a former employee at the European headquarters.
“A Huawei spokesperson contradicted that account. He said that German managers are not shadowed by Chinese ‘supervisors,’ nor is there a glass ceiling for non-Chinese. He said that just 59% of the management are employees deployed from China.
“[Yet] year after year, Huawei sends young Chinese abroad. In China, the staff who are meant to earn their spurs away from home are called ‘sea turtles.’ Their typical profile: young, male, well-educated. Our sources indicate there is a clear hierarchy in Huawei’s Europan operation. ‘Sea turtles clearly dominate.’
“The junior staff are under pressure: hard working conditions and constant control by the company are part of everyday life, fostering the ‘wolf culture’ that company boss Ren likes to invoke. An internal document with the unwieldy title Assignment and Mobility Management Regulation demonstrated how Huawei determines parts of its employees’ private lives in Western Europe.
”Those who have obtained residency in a [European Union] country or whose spouses are permanent EU residents and those who have voluntarily applied for permanent residency in the EU must leave Europe as soon as possible,’ [according to a] company document in Chinese. ‘If they don’t follow the order, the company will terminate their employment.’
“When asked, Huawei confirmed in principle that such internal regulations existed. [But] a spokesperson said that the company had no opinion on the private affairs of its employees. Days later, a spokesperson [told] us that the regulation on residence permits [was] no longer valid. However, when asked, he did not want to say when [that happened.”
A ‘small Chinese embassy’ in Dusseldorf
“One source compares Huawei’s European headquarters in Dusseldorf to a ‘small Chinese embassy,’ where Chinese employees have built their own world. Ex-employees [revealed] that the areas of responsibility are often defined in such a way that there is little contact between employees from China and those from elsewhere. Chinese and non-Chinese at Huawei are a world apart, even outside of work.
“European employees rarely find out what is really going on in the company on a day-by-day basis, said a former German employee. However, Chinese colleagues were occasionally asked if they wanted to go out for dinner. ‘After a few beers, you find out what is going on in the company and what is not,’ an employee said. Yet many of the Western staff prefer not to socialize after work.
“Trade unionist Ulrike Saaber from Europe’s largest industrial union IG Metall established contacts with several former Huawei workers. She described the narrow world in which Chinese expats move. ‘The Chinese have their roots and family in China, and only come here to work, [so] they are totally isolated.’
“According to Saaber, Chinese ex-pats have little knowledge of German laws and therefore [rarely] try to claim them for themselves. ‘It is often the case that these people are drawn together in their free time by representatives of their employer.’ There are informal meetings, he said, where the expats are ‘oriented’ along company lines. [In response], Huawei said that joint leisure activities are organized independently by interested colleagues.”
‘Please don’t tell anyone that I’m learning German’
“The consequence of the tough corporate policy is a climate of fear. According to our Dusseldorf sources, the mistrust already starts when expats acquire knowledge of local languages. ‘Please don’t tell anyone that I’m learning German,’ a Chinese employee is reported to have said to a former colleague who spoke to us.
“There are reasons why Huawei can treat its employees like this and yet hardly anyone rebels. One is the way the company pays its Chinese employees. After working for Huawei for some time, they receive share certificates owned by Huawei’s union. The shares are used to give employees a cut of the profits. According to the company, this is done to motivate them. For them, the model seems lucrative, but only as long as their plans are aligned with those of Huawei.
“In fact. employees do not truly have a stake in the company: anyone who resigns or is fired is forced by the company to sell their shares back. According to a Huawei spokesperson, this is in line with ‘our long-established, generally known and contractually fixed rules in this area.’ The only exceptions are for long-serving, older employees, who are allowed to keep their shares when they retire.
“So if an expat decides against returning to China, they not only lose their job but also this form of retirement provision. ‘Huawei is a company, not a prison: if you want to quit, you can quit. But this decision is not easy,” said a source who worked in Dusseldorf for more than five years, including in the human resources department.”
Strict rotation for Chinese expats
“The company is determined to prevent ex-pats from putting down roots outside of China and obtaining residency rights in European countries, a source who worked for the company for several years said. ‘The internal atmosphere is that if you marry a local person and get citizenship rights, then this is seen as a betrayal,’ an ex-employee in London told The Daily Telegraph.
“One method the company uses to enforce the loyalty of Chinese employees is the strict rotation principle. No ex-pat can stay in the same country outside of China for more than five years. Several sources say that the company wants to prevent Chinese employees from developing close ties to their host nation.
“Apparently, Huawei categorically refuses to compromise on this. ‘Upon the completion of a five continuous years assignment in a country, expatriates who are not interfacing with the customers will be relocated regardless of all factors,’ Huawei’s guidelines, for Western Europe, stated.
“For the group, ‘the principle of rotation is important and essential at many different levels,’ a Huawei spokesperson said. The constant change of location allows the organization to remain flexible, and employees can gain experience in different roles and countries.”
Hardly any employees are over the age of 50
“Huawei demands discipline and loyalty from its European managers just as it does from its ex-pats. But the loyalty the company demands is only partially met by itself, especially towards older European employees. We have spoken to several former employees who were fired by the company.
“Their accounts are similar: ‘I always did everything exactly by the book,’ said one of our sources. Nevertheless, Huawei fired the source after several years of loyal service. The ex-employee doesn’t want to read their name on the internet, to avoid trouble with the company, but said their only offense was their age.
“Huawei appears to take pride in its young workforce. Of 194,000 employees worldwide in 2019, only 2% are older than 50 years, the company said on its website. [The company] does not like it when someone is employed by the company beyond their 60th birthday, according to several of our sources. According to them, if older employees do not leave voluntarily, Huawei resorts to pressure.
“The company’s tactics are said to include giving [those members of staff] meaningless tasks or no tasks at all, as well as transferring them to other workplaces, sometimes even to other locations. [In response,] Huawei said that it does not resort to such measures.”
Mistakes punished by naming and shaming
“Our sources agree that Huawei regularly punishes its Chinese employees for their alleged failures, often in front of colleagues. Via internal e-mail lists, the company sometimes lets everyone know who, in Huawei’s opinion, has not behaved properly and what sanctions have been imposed on them.
“According to our sources, the company holds its managers responsible for the missteps of individuals. Within the group, they are treated as parents to their employees, their children. The company frequently hosts what ex-employees call ‘criticism and self-criticism,’ in the style of a communist ritual in the spirit of Mao’s Cultural Revolution.
“A Chinese manager, for example, had to admit he was at fault in a telephone conference after a bidding process failed, a non-Chinese source said, who took part in the call. Everyone present was asked to criticize the man. Our source said they felt very uncomfortable. Shortly afterward, Huawei sent the manager from Dusseldorf back to China.
“Self-reflection is ‘an important principle of our corporate culture’ and serves to improve the company and its products and services, Huawei said. Managers are encouraged to discuss the current situation in team meetings and to explore ‘room for improvement.’”
Huawei embraces the 9-9-6 working model
“When it comes to working hours, the technology company also follows a course that is rather unusual in Europe. Attendance often extends beyond core working hours, in tune with the so-called 9-9-6 principle for employees in China. The principle refers to employees’ presence in the office from 9 am to 9 pm, six days a week.
“This is hardly compatible with German labor law. For years, workers at the Dusseldorf site could record when they arrived for work, our sources report, but the company did not allow a record of when they left. Non-Chinese employees rebelled and have since been effectively exempted from the rule. Expats, however, still do not have an official recording of their working hours, according to our sources.
“A company spokesperson told netzpolitik.org that there had been complaints under [the] labor law. Since 2018, Huawei has been ‘inspected for compliance with occupational health and safety regulations, in particular [for] the Working Hours Act,’ the Dusseldorf district government stated.
“[In response,] Huawei stated that it complies with European labor law. Employees are allowed to work after 8 pm ‘on a voluntary basis,’ as long as they do not exceed the maximum working hours of 10 hours per day. ‘It is not the case that employees regularly spend the night in the office,’ a company spokesperson said.”
You can read the original article by Daniel Laufer and Alexander Fanta on netzpolitik.org here. It was the result of months of investigation by netzpolitik.org with media partners of The Signals Network, including The Daily Telegraph in the United Kingdom, El Mundo in Spain and Republik in Switzerland.
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