Game of drones: Chinese giant DJI hit by U.S. tensions, staff defections

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Shenzhen: Chinese drone giant DJI Technology Co Ltd (DJI Technology Co Ltd) has established such a successful US business in the past decade that it has driven almost all its competitors out of the market.

However, according to interviews with more than twenty current and former employees, in recent weeks and months, its North American operations have been hit by internal sanctions, with a large number of layoffs and departures.

The loss of key managers, some of who have joined rivals, has compounded problems caused by U.S. government restrictions on Chinese companies, and raised the once-remote prospect of DJI’s dominance being eroded, said four of the people, including two senior executives who were at the company until late 2020.

About a third of DJI’s 200-strong team in the region was laid off or resigned last year, from offices in Palo Alto, Burbank and New York, according to three former and one current employee.

In February this year, DJI’s head of U.S. R&D left and the company laid off the remaining R&D staff, numbering roughly 10 people, at its flagship U.S. research centre in California’s Palo Alto, four people said.

DJI, founded and run by billionaire Frank Wang, said it made the difficult decision to reduce staffing in Palo Alto to reflect the company’s “evolving needs”.

“We thank the affected employees for their contributions and remain committed to our customers and partners,” it said, adding that its North American sales were growing strongly.

“Despite misleading claims from competitors, our enterprise customers understand how DJI products provide robust data security. Despite gossip from anonymous sources, DJI is committed to serving the North American market.”

It did not comment on the other U.S. staff departures that current and ex-employees spoke of, although it told Reuters last year its global structure was becoming “unwieldy to manage”.

Since its establishment in 2006, DJI has become a symbol of China’s innovation. It is one of dozens of companies that have been caught up in trade and diplomatic hostilities between Washington and Beijing, such as Huawei and ByteDance.

Employees and competitors say that the company’s brand influence, technical know-how, manufacturing capabilities and sales force mean that it will not soon win the multi-billion dollar U.S. and global non-military drone market.

But according to three former executives and two competitors, the December order to add the company to the US Department of Commerce’s “Entity List” and the closure of R&D operations in California may affect its ability to meet the needs of American customers.

The Commerce Department’s list based on allegations including “high-tech surveillance” enabled by DJI prohibits the company from purchasing or using US technology or components.

In the same month, Romeo Durscher, DJI’s head of public safety in the United States, resigned. He played a central role in building the company’s business, providing drone technology to non-military U.S. government departments and agencies.

Durscher is a former project manager of NASA, who is quite influential in the drone industry. He now works for DJI’s competitor, Auterion, Switzerland.

He said he left DJI because he was disheartened by the staff cuts and what he described as internal power struggles between the U.S. team and its China headquarters. He added that the U.S. reorganisation complicated the task in dealing with the fallout from U.S.-China tensions and winning government business.

“It’s not an easy decision to leave the market leader that’s really far ahead of everyone else,” said Durscher, who joined DJI in 2014. “But those internal battles were distracting from the real purpose and in 2020 it got worse … we lost tremendous talent at DJI and that’s very unfortunate.”

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