According to Forbes Russia, Chinese telecom giant Huawei Technologies Corporation has furloughed some local employees after suspending new contracts with operators.

The publication citing sources reported that a portion of Huawei’s workforce in the Moscow office was put on a leave of absence for at least a month in April.

The company also reduced staff in the marketing department, although workers from China still came to the office.

At the end of March, the company stopped entering into new contracts to supply network equipment to Russian operators.

The source said that Huawei, already saddled with U.S. sanctions for alleged espionage and ties to the Chinese military, was picking up Washington’s warnings of secondary sanctions for helping Russia.

Guo Ping (郭平 Guō píng), Huawei’s vice-chairman, stated at the end of March that the company was evaluating risks to its operations after the Ukraine war broke out.

He added, “We’ve noticed that some countries and regions have issued some policies, and they’re complex and constantly changing. Huawei is still carefully assessing these policies.”

According to Izvestia, Huawei accounts for 30-40% of base stations operating in Russia. Therefore, their fleet renewal and component supply suspension might impact telecom operators.

Alexander Sysoev, head of the Infrastructure Solutions department at the Croc IT integrator, said that if Huawei pulls out of Russia, the consequence could be a shortage of data storage systems and telecom equipment for the country. Moreover, not all types of these systems are interchangeable with domestic counterparts. He speculated that Huawei is likely revising its product line to supply Russia with those products made without American technology.

The U.S. has imposed export sanctions, prohibiting any technology items made in foreign nations using American machinery, software, or blueprints from being exported to Russia.

Many Chinese companies have fallen into the crossfire from sanctions placed on Russia by Western nations in response to its invasion of Ukraine. In particular, countries are monitoring China to see if, as a strategic partner of Russia, would eventually offer Moscow assistance in the war.

China has refrained from criticizing Russia’s actions or calling it an invasion throughout the conflict. It has also opposed the widespread sanctions on Russia.

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