A Chinese telecom giant has suspended Russian operations and furloughed employees as sanctions bite: reports

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Two Russian-language news outlets reported that a major Chinese telecommunications equipment maker is scaling back its operations in Russia to avoid being hit by US sanctions related to the war in Ukraine.

Consumer devices such as laptops, and fitness trackers are made byHuawei. The corporate website for Russia shows one office in Moscow.

According to an April 1 article from Russian news outlet Izvestia, anonymous sources from the business partners of Huawei said that the company stopped taking on new contracts to supply network equipment to Russian operators at the end of March.

Forbes Russia reported on Saturday that unnamed sources from companies that work with the company said that Chinese employees could continue working in Russia while Russian employees went on mandatory leave for the month of April. The Chinese maker let go of some marketing employees, according to an article.

The two outlets noted that the plans to scale back operations may only be temporary, as the company wants to see how it can remain in the Russian market while avoiding US sanctions.

When contacted by Insider,Huawei declined to comment.

Many international companies with a presence in Russia have pulled out of the country because of the sanctions imposed by the US and European Union.

On Monday, Swedish maker Ericsson said it would suspend its business in Russia indefinitely, and on Tuesday, Finnish competitor Nokia said it would be exiting the market.

Beijing has avoided condemning Russia. It criticized the western countries for their role in the conflict. As a result, Chinese companies are staying in Russia, with some even looking for new opportunities.

According to a March 29 transcript released by the US State Department, the US Commerce Department threatened Chinese companies with a complete ban on both trade and financing if they were found to have bypassed the sanctions on Russia.

The Chinese firm has been the subject of several US sanctions since the beginning of the year. During the year-end holiday season in 2020, the global shipments ofHuawei's phones fell by more than 40%, as the company was blocked from accessing US tech components and services.

Russia has become an essential market for the company. In Russia, it won contracts to build 4G and 5G networks. The market for wireless network equipment in Russia is dominated by two Chinese companies, according to the Financial Times.

According to Forbes Russia and Izvestia, the US Treasury Department's decision last week to lift restrictions on the supply of US telecommunications equipment to Russian entities could offer a lifeline to the company.

In the meantime, it is possible that Huawei will revise its product line to supply Russia with products that do not use American technology.