According to foreign media reports, Xilinx will reduce 123 employees at its San Jose headquarters recently. The industry generally believes that this is the result of the ongoing sanctions imposed by the US government on Huawei, one of the company's largest customers.
Although Xilinx did not explain the reasons for the layoffs, a Xilinx spokesperson said that after the U.S. government banned Huawei from purchasing U.S. parts and software, the FPGA business has not recovered from the loss of Huawei. Adjustments are necessary. Xilinx had previously applied for a license to sell parts to Huawei, but was rejected.
In addition, Xilinx believes that 5G is developing faster than expected: the company had hoped to deliver programmable gate arrays to Huawei and other 5G technology manufacturers to power next-generation communication systems, but falling orders forced it to fire some people.
Although there has been much talk about the impact of U.S. policy on Huawei, little is known about the extent to which these restrictions have done to suppliers that rely on Huawei to do business. Xilinx had previously warned that business losses caused by Huawei's sales ban would affect its profits. Since the implementation of the spring 2019 trade ban, the company's stock price has not seen a rebound, falling from about $ 140 to $ 90 per share.