Huawei Technologies Co. is expected to slash hundreds of jobs at a US-based R&D subsidiary, according to the Wall Street Journal.

The 'extensive' layoffs will affect workers at Futurewei Technologies, which employes around 850 people at labs across the country, including California, Texas and Washington State.

The exact number of layoffs couldn't be determined, but one of the people said they were expected to be in the hundreds. Some of Huawei’s Chinese employees in the U.S. were being given the option of returning home and staying with the company, another person said. -Wall Street Journal

Following the May 16 decision by the Commerce Department to place Huawei on its so-called 'entity list,' which blocks companies from supplying US-sourced technology to Huawei without a license, Futurewei employees have faced difficulties communicating with their China-based colleagues. The company employs over 180,000 people worldwide.

Huawei has been virtually unable to buy critical US components and software for its telecommunications products - including smartphones and cellular base stations which are sold worldwide. Last year alone the company bought $11 billion worth of US tech. It is the largest maker of telecommunications equipment in the world, and the #2 vendor of smartphones - ahead of Apple but behind Samsung.

Analysts say the entity listing poses the most serious threat to Huawei given its reliance on American chips and other technology. Huawei founder Ren Zhengfei said last month that the measure would cost Huawei $30 billion in lost revenue this year and next. And the company’s international smartphone sales fell 40% in the month after the blacklisting was announced, though the decline has since moderated. Huawei had more than $100 billion in revenue last year, according to its annual report. -Wall Street Journal

Under the Commerce Department's entity listing, "any unlicensed transfer of any technology of any sort by anyone from the U.S. to Huawei is prohibited" according to Obama-era Commerce Department official Kevin Wolf.

Meanwhile, Huawei is also battling a pair of US indictments on charges related to the theft of Intellectual Property (IP) as well as violations of US sanctions on Iran.

That said, while US officials have been lobbying global allies to similarly blacklist Huawei, it appears that the Trump administration may relax some of the restrictions in order to move trade negotiations forward with Beijing.

A reprieve for Huawei appeared to be in sight after President Trump said at the Group of 20 summit at Osaka, Japan, last month that he would allow some tech exports to the company to resume. Beijing sees an easing of restrictions on Huawei as a precondition for any trade deal with Washington. On Tuesday, Commerce Secretary Wilbur Ross said the U.S. would begin granting export licenses to Huawei suppliers whose sales to the Chinese company don’t put national security at risk. Meanwhile, Treasury Secretary Steven Mnuchin has been urging U.S. suppliers to apply for licenses. -Wall Street Journal

The United States claims that Huawei and its widely used technologies could easily be used by the Chinese government for espionage. The company has pushed back on the claim, insisting that it is an independent company with no government ties.

Last week, journalist and Asia expert Isaac Stone Fish wrote in Washington Post Op-Ed hat more than one Huawei executive have direct ties to the People's Liberation Army (PLA).

Huawei writes on its website. “Ren joined the People’s Liberation Army Engineering Corps in 1974 and retired nine years later in 1983.” It omits Huawei’s many other links to the PLA, such as how the company built the PLA’s first nationwide communications network in the late 1990s. ... Consider chief legal officer Song Liuping, who has emerged as the defender of Huawei’s innocence in both the U.S. legal system ... a search in Chinese-language media reveals that Song received his bachelor’s, master’s and PhD from the People’s Liberation Army National University of Defense Science and Technology. ... Song is not the only top official with undisclosed ties to the PLA. Huawei’s website lists the company’s chairman, Liang Hua, as having received his doctorate from the school now known as the Wuhan University of Technology. Liang received his bachelor’s and master’s from the Chinese military research institute the Northwestern Polytechnical University (NPU), according to an article on that university’s website. That website also shows that Yu Chengdong, the chief executive of one of Huawei’s three business units, Huawei Consumer BG, received his bachelor’s from NPU... ... imagine the outcry if Google’s Eric Schmidt had received his bachelor’s from West Point but hid that in his bio, or if Google declined to admit that it had ever worked with the Pentagon? -WaPo

Huawei has also fended off claims that the Chinese government has a financial interest in the company. In April, a report from Fullbright University Vietnam and George Washington Law School titled "Who Owns Huawei" suggests "Regardless of who, in a practical sense, owns and controls Huawei, it is clear that the employees do not."

In response, Huawei held a press conference in which Chief Secretary of the Board of Directors, Jiang Xisheng, said "Most of what the US government says is not true," adding "Regarding this point, we have responded many times. Though it is not under my charge, one thing is for sure – there is no government capital in Huawei."