Chinese vendor to reportedly axe 10% of staff from its handset division.

ZTE plans to cut 3,000 jobs during the first quarter, it emerged late last week.

Sources at the Chinese kit maker said in a Reuters report on Friday that 600 redundancies will be made at its handset division, equal to 10% of its employee base. According to the report, more than 20% of the cuts at the handset business will be made in China.

Reuters also cited a manager of one of ZTE’s overseas offices as saying he had been told to shed 10% of the staff in his department by the end of January.

This manager was also allegedly given the names of people who have been branded as ‘unstable factors’ because they tried to apply for jobs at rival Huawei, and was told to let them go as well.

ZTE faces a possible ban on using U.S.-made components in its equipment after it was found to have violated export controls imposed on Iran.

The company has been granted temporarily relief from the sanctions, giving it time to resolve its issues with the U.S. Department of Commerce.

According to Reuters, the reprieve is due to expire on 27 February. If ZTE fails to reach a settlement with the U.S. before then, it could face being unable to use vital components from the likes of Qualcomm, Intel and Microsoft in its equipment.

The news agency reported that ZTE chairman Zhao Xianming – who was promoted from the role of CTO in April in the wake of the export scandal – told staff in his New Year speech that the company faces the biggest crisis in its history.