Despite a partial reprieve from a ban imposed by Trump administration in the midst of the U.S.-China trade war, Huawei Technologies Co. Ltd. is set to lay off a substantial number of its U.S. employees, according to a report from The Wall Street Journal Sunday.

The layoffs, which the Chinese company has not confirmed, are said to affect primarily the company’s U.S.-based research and development subsidiary Futurewei Technologies, which employs 850 people in Santa Clara, California, Austin and Bellevue, Washington.

Although there has been a partial reprieve on Huawei receiving technology from U.S. companies, it remains on the Commerce Department’s banned entities list, restricting Huawei and Futurewei employees from communicating with the company’s China head office. In effect, despite employing U.S. nationals in the U.S., Huawei’s R&D arm in the country is mostly unable to share what it develops with its Chinese owners.

“Futurewei employees have faced restrictions communicating with colleagues in Huawei’s home offices in China following the May 16 Commerce Department decision to put Huawei on its so-called entity list, which blocked companies from supplying U.S.-sourced technology to Huawei without a license,” the Journal reported. “Several employees have already been notified of their dismissal, while additional planned cuts could be announced soon.”

The partial reprieve from a total ban on Huawei in the U.S. only works in one direction: U.S. companies can, with approval from the Commerce Department, provide U.S technology to the company such as central processing units as manufactured by Qualcomm Inc. or Google LLC’s Android. The reprieve doesn’t work in the opposite direction, with Huawei remaining banned from providing technology and services in the U.S.

Notably, that includes 5G technology, of which Huawei is a world leader. The U.S. government argues that Huawei presents a national security risk because of the company’s alleged ties to the Chinese government.

The U.S. hasn’t been alone in its concern about Huawei-Chinese government ties.h Australia also banned the company from its 5G rollout. The U.K. government, while not as yet outright banning Huawei, has expressed similar concerns.

Photo: Duncan Riley