Huawei this week cut 600 positions from its Futurewei Technologies U.S. research arm, which operates out of Silicon Valley, Chicago, Washington state and Dallas. The move, which represents 70% of the division’s 850 roles, follows the hardware giant’s blacklisting by the U.S. government.

Reuters initially reported the news via a source from the company who noted that work has been more or less nonexistent for the branch for more than two months. “On the 17th of May, Huawei asked everyone at Futurewei to upload everything to the Huawei cloud, right before the ban took effect,” the source told the agency. “After that basically Futurewei has stopped doing any work — almost stopped everything.”

Huawei has since acknowledged the move, writing, “Futurewei Technologies announces a reduction in force, directly impacting over 600 US positions.”

The research wing has played a key role in filing thousands of patents for Huawei, including ones relating to 5G. That network technology has been at the center of recent concerns in the U.S., as red flags have been raised around Huawei’s networking equipment and potential ties to the Chinese government.

Huawei’s addition to the U.S. Commerce Department’s “entity list” has already had wide-ranging impact on the company that could ultimately prove hugely detrimental, banning access to essential technologies from American companies like Google and international component makers like ARM.

Earlier this week, another report surfaced tying Huawei to North Korea’s 3G network, a move that could potentially be in violation of U.S. sanctions against the country.