(Reuters) – Chinese drone giant DJI Technology Co Ltd built up such a successful U.S. business over the past decade that it almost drove all competitors out of the market.
Yet its North American operations have been hit by internal ructions in recent weeks and months, with a raft of staff cuts and departures, according to interviews with more than two dozen current and former employees.
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”.
DJI, which has become a symbol of Chinese innovation since it was founded in 2006, is one of dozens of companies caught in the crossfire of trade and diplomatic hostilities between Washington and Beijing, like Huawei and Bytedance.
Staff sources and competitors say the company’s brand reach, technical know-how, manufacturing might and sales force mean it won’t lose its crown anytime soon in the multi-billion-dollar U.S. and global markets for non-military drones.
But a December order adding the company to the U.S. Commerce Department’s “Entity List” along with the closure of its R&D operation in California could affect its ability to serve the needs of U.S. customers, according to three former senior executives and two competitors.
The Commerce Department listing, enacted over allegations including DJI enabled “high-technology surveillance”, prohibits the company from buying or using U.S. technology or components.
The same month, Romeo Durscher, DJI’s U.S.-based head of public safety, who had played a central role in building the company’s business in providing drone technology to non-military U.S. government departments and agencies, left his job.
Durscher, a former NASA project manager and an influential figure in the drone industry, now works at Swiss company Auterion, a competitor to DJI.
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.”
