Founder of China's Huawei urges focus on cash flow, survival in downturn - media

© Reuters. FILE PHOTO: Huawei founder Ren Zhengfei attends a panel discussion at the company headquarters in Shenzhen, Guangdong province, China June 17, 2019. REUTERS/Aly Song

SHENZHEN, China (Reuters) - The founder of China's Huawei Technologies has told employees the company must shift its focus from pursuing scale to ensuring profits and cash flow as the global economy enters a long period of recession, media reported on Tuesday.

"With survival the main principle, marginal businesses will be shrunken and closed, and the chill will be felt by everyone," founder Ren Zhengfei wrote in an email to staff on Monday, the financial news outlet Yicai reported.

Huawei said the email was for employees and declined to comment further.

Yicai did not elaborate on whether Ren explained which businesses were "marginal" but said he drew attention to the importance of the company's traditional focus on information and communications technology (ICT).

"We must be clear that building ICT infrastructure is Huawei's historical mission, and the more difficult the times are, the more we cannot waver," he said.

The United States put Huawei on an export blacklist in 2019 that barred it from accessing critical technology of U.S. origin, hurting its ability to design chips and source components from outside vendors. The United States says Huawei is a security risk, which the company has denied.

Huawei's first-half results showed a 52% drop in profits to 15.08 billion yuan, according to Reuters calculations, with a weak economy, COVID-19 disruption and supply chain challenges hurting the company's device business that sells smartphones and laptops.

Ren mentioned the company's cloud computing, digital energy and smart car businesses as areas where the company should see development, according to the report.

Ren said the outlook for the company was uncertain beyond the next couple of years.