Chinese surveillance camera maker Hikvision is reportedly downsizing its research and development (R&D) department. The company that faces US sanctions may be planning this move amidst geopolitical and economic pressures. Although the company denies any “large-scale lay-offs,” a report by Chinese online news platform Sina Tech (seen by the South China Morning Post) cited sources to suggest that over 1,000 employees in China could be affected by these job cuts.
Hikvision has reportedly claimed that it is making internal adjustments necessary for “optimising R&D power” in its headquarters and key sales cities. Several Chinese media outlets also reported that the company has already adjusted “some regional job settings accordingly”. As per its annual report, the Shenzhen-listed company had 58,544 employees at the end of last year.
While the company maintains it is not conducting mass layoffs, the term “optimisation” is often used in China to describe job cuts and avoid scrutiny. In China, significant layoffs are strictly regulated. If a company plans to lay off 20 or more employees or reduce its workforce by 10% or more, it must involve labour authorities in the process.
Possible reasons to blame for this move
This move reflects the challenges Hikvision faces as it navigates a complex global landscape, including US sanctions and a slowing Chinese economy. Hikvision and other Chinese video surveillance technology providers face significant restrictions in the US market due to allegations of human rights abuses.
In 2019, the US added Hikvision and 27 other Chinese entities, including its competitor Dahua Technology, to the Entity List which bars them from purchasing components from US companies without government approval. This action stemmed from accusations of their complicity in the oppression of Uygur Muslims in China.
Furthermore, in 2022, the US Federal Communications Commission imposed a ban on Hikvision and four other Chinese companies, including Huawei Technologies, prohibiting them from selling new equipment in the US due to perceived national security risks. Hikvision has strongly opposed these US government decisions.