(Yicai) May 13 -- Honor has named new appointments for nearly half of the key roles in its China business unit, following a management shake-up led by the Chinese mobile phone maker’s new chief executive officer aimed at strengthening its competitive edge, Yicai learned from a source familiar with the matter.

Thirty-eight core positions in the China business unit were re-advertised recently, a company insider told Yicai today. It was an ‘open competition’ available to all employees and the entire interview process was live-streamed internally within the company, for all to see. In the end, 17 of these positions were given to new people.

“Nearly half of the 17 newly appointed managers are young professionals born after 1990, and the youngest is only 27 years old,” the person said.

The restructuring of middle management in the firm’s China operations is part of Chief Executive Officer Li Jian’s Eagle Plan, which he introduced soon after taking office in January, the person said.

“After stabilizing core leadership, the company began making personnel changes for important China positions. The Chinese market remains its main market and there is intense competition, so the firm needs more agile organizational structures,” the person said.

Li’s leadership style is strong and decisive, an industry insider who previously worked with Li told Yicai. Holding a live-streamed job competition reflects his approach and is meant to energize the organization.

In addition to the middle management reshuffle, Li has set up several new departments. These include an AI new industries department, a new business model development department and an emerging industries incubation department. The AI research and development division has also been upgraded to a top-level R&D department within the corporate structure.

AI Push

Li has repeatedly said at internal meetings that it is a matter of strategic importance for Honor to forge partnerships with internet enterprises, AI innovators and global industrial chains in order to fully embrace the AI era, a source said. As a result, AI implementation has become a major performance metric in Honor’s product development.

“Shifting a large portion of the R&D budget into AI is probably the biggest change in company strategy since Li became CEO,” said an industry analyst. In today’s evolving market, mobile phone makers need to transcend hardware and establish a foothold in the AI ecosystem. Whether Honor can use AI to reshape and build a distinct brand identity will be a key factor in determining its global success.

Honor will transition from smartphone manufacturer to a global AI device ecosystem builder, Li said in March. The Shenzhen-based firm plans to invest over USD10 billion in AI over the next five years.

Honor started out as the telecoms giant Huawei Technologies’ budget phone brand and was spun off as an independent entity in November 2020. Following several funding rounds, Honor now has 23 shareholders, including local state-backed investors, supply chain partners and private capital.

Honor ranked fifth in China’s smartphone market last year, with 15 percent market share, according to Canalys data. This was a 1 percentage point drop from 2023, with shipments sliding 3 percent.

Editors: Tang Shihua, Kim Taylor