Arun Sudhaman 27 May 2019 // 8:01AM GMT
LONDON — Racepoint has shed staff in its London office after losing out from key client Huawei's global consumer PR review, the Holmes Report can reveal.
The review, which began last year, covers consumer PR duties for Huawei-branded devices across 20 key markets outside China. It is understood that Racepoint is replaced on Huawei's global consumer PR roster by Grayling, building on the company's existing Western European relationship with Huntsworth sibling Red Consultancy. (Huawei's consumer PR roster also includes long-term partner H+K Strategies.)
In response, Racepoint has let go of at least two staffers in its London office, according to CEO Larry Weber, although it is believed that at least another three have resigned from an operation that previously numbered 18 people. That includes Europe/Asia MD Andrew Laxton, who has chosen to leave the firm after more than eight years with Racepoint in Hong Kong and London.
Weber told the Holmes Report that Racepoint remains "absolutely committed" to its London office, which will now be overseen by global tech lead RJ Bardsley from San Francisco. Weber also noted that Racepoint's US business with Huawei continues to grow, after the Chinese tech giant reviewed global corporate duties last year.
The consumer loss does not affect Racepoint's 12-strong Hong Kong office, however, which will continue to support the US on Huawei's corporate and public affairs business, after previously handling consumer PR duties for the Chinese company.
Weber returned to global CEO duties last year upon the departure of previous Racepoint CEO Peter Prodromou, who was soon followed by Greater China MD Mark Jackson. Those changes came amid a rocky period that saw the firm's former CFO plead guilty after embezzling millions, along with staff cuts at its Boston HQ.
The consumer PR switch comes as the Trump administration steps up pressure on Huawei, blacklisting the company and cutting it off from the US software and components it requires to make its products.
After overtaking Apple to take second spot on the global smartphone rankings in 2017, Huawei's consumer division is viewed as the key driver behind its sales growth of 21% in 2018 to $108.5bn, amid a security backlash against its telecom networks unit.
However, Huawei smartphones and laptops will need to build new operating system and processor designs if the company can no longer work with US players like Google (Android), Intel, Qualcomm and ARM. That is likely to pose a significant challenge to Huawei's global consumer tech ambitions.
The consumer PR review is unrelated to Huawei's recent decision to consolidate global corporate PR duties with BCW.
Representatives from both Huawei and Grayling declined to comment.
Additional reporting by Diana Marszalek and Maja Pawinska Sims.