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."
U.S. SECURITY CONCERNS
Privately held DJI doesn't publish sales figures. The U.S. Department of Defense estimated the American non-military market was worth $4.2 billion last year. Consultancy DroneAnalyst said DJI controlled almost 90% of the consumer market in North America and over 70% of the industrial market.
The December listing by the Commerce Department, and the prohibition on buying U.S. parts, may impact the firm's mobile apps, web servers and some battery and imaging products, said David Benowitz, head of research at DroneAnalyst and a senior figure with DJI's enterprise team, which works with industrial customers, in Shenzhen before he left last summer.
DJI said in December that the ban would not affect U.S. customers' ability to buy and use its products.
The listing followed other official blows. In October, the U.S. Department of the Interior said it would only buy drones from companies okayed by the Department of Defense, which last August published a list of five approved drone suppliers to the federal government - four American and one French.
DJI said there was no "broad-based U.S. government ban on purchasing DJI drones".
"Congress considered that approach last year and rejected it, because ... such a ban would be challenging for many companies and government bodies that rely on drones," it added.
'WE'RE STILL PRIMITIVE'
Benowitz said persisting U.S.-China tensions and the push by Washington to support DJI's rivals could see the company's North American market share decline. He added that, while the federal government comprised a relatively small part of DJI's business, its restrictions could have a "chilling effect", with other buyers worried about tougher measures in the future.
"We're at a point where there are too many market opportunities for one player to dominate," he said.
Yet he added alternatives to DJI were relative minnows, though both policy support and security concerns over Chinese drones had brought them growth in the last year. Competitors to DJI include France's Parrot and California-based Skydio.
Chris Roberts, CEO of Parrot Inc, Americas, said 2020 had been a significant year for the company in the United States, having been named an approved supplier by the Defense Department and won business from emergency services and security agencies.
Skydio announced $170 million in D-round funding last week and said it had a valuation of over $1 billion.
"DJI makes good hardware but we are still very early in the market, and very primitive compared to what ultimately should exist," Skydio CEO Adam Bry told Reuters.
PHANTOM DRONE FLEETS
When Durscher joined DJI back in 2014, the company's Phantom series was transforming drones from a niche hobby to a mainstream gadget. He said he was particularly drawn by the chance to bring drones into the kit of fire and rescue departments.
He said the technological advances of smaller rivals in the last year were tempting for some public-safety agencies, who might say "let's go with this drone now so we don't have to deal with the data security".
He added that change could come as government departments and companies looked to replace drone fleets that are nearing the end of their life cycles.
A fleet is typically expected to last three to four years, according to Benowitz.
Durscher and several other staff compared DJI's internal rivalry over projects to "Game of Thrones", the TV series where rival factions vie for power. He said this resulted in a rotating door of Shenzhen bosses, and that he reported to 12 different managers in his six years at the company.
Durscher's departure from DJI followed those of other key executives in North America last year, including director of business development Cynthia Huang.
Huang, who now works with Durscher at Auterion, said she became increasingly frustrated because she felt DJI wasn't able to meet all the growing demands of the enterprise market. Additionally, she said, job cuts over the past year added to the reasons she decided to leave. The losses in Palo Alto, Burbank and New York had followed cuts made to DJI's global sales and marketing teams, which Reuters reported in August.
"Some of the people that we lost in those layoffs, it didn't make sense," said Huang, who was hired in 2018 to take the lead in building DJI's enterprise business in North America. "The continued exodus of talent was discouraging."
Reuters
Mon Mar 08 2021
A drone operator flies his drone as Chinese drone maker DJI holds a demonstration to display an app that tracks a drone's registration and owner in Montreal, Canada, November 13, 2019. REUTERS pic
Bing kini digunakan lebih 140 juta pengguna setiap hari
Selain Bing, aplikasi Copilot untuk iOS dan Android juga memperlihatkan peningkatan kadar muat turun dari hari ke hari.
Rebel: Tak adil kalau tak tengok, dengar komen orang dari luar saja - Awie
Awie memberitahu kisah perjuangan berkaitan kumpulan pertubuhan yang cuba diketengahkan itu sudah lama ada di dalam masyarakat, cuma tidak diketahui saja pergerakannya.
Nahas helikopter: Kementerian pertahanan, ATM aktifkan Tabung Tragedi Lumut 24
Kementerian Pertahanan dan Angkatan Tentera Malaysia menubuhkan tabung khas 'Tabung Tragedi Lumut 24' bagi orang ramai menghulurkan bantuan kewangan.
Blok Negara Islam Sedang ‘Stress’? Langsung Dialog 4 Menteri Luar – Arab Saudi, Turkiye, Jordan dan Mesir
Situasi meruncing di Gaza, konflik Iran-Israel dan ditambah pula persaingan kuat dua kuasa, Amerika Syarikat dan China dilihat terus membayangi percaturan geopolitik dan geoekonomi negara-negara Islam di Asia Barat. Menteri Luar Turkiye dan Arab Saudi antara yang tampil duduk sepentas
membincangkan apa lagi yang bakal jadi nanti.
#SpecialMeeting24
membincangkan apa lagi yang bakal jadi nanti.
#SpecialMeeting24
Tiada bukti kaitkan guru dengan kes pedofilia di MRSM Tumpat - Polis
Tiada bukti dapat dikaitkan dengan seorang guru berhubung dakwaan berlaku kes pedofilia di Maktab Rendah Sains Mara (MRSM) Tumpat.
Polis tahan pasangan kekasih, rampas pistol dan dadah bernilai RM4.73 juta
Polis menahan sepasang kekasih dipercayai terlibat kegiatan pengedaran dadah di sekitar Lembah Klang dan merampas pelbagai jenis dadah bernilai RM4.73 juta dalam serbuan di sebuah kondominium di Pucho
Suami kongsi gambar nikah, netizen beri kata-kata semangat buat Irma Hasmie
Perkongsian Redza menimbulkan respons yang pelbagai dalam kalangan netizen. Beberapa peminat turut dilihat memberikan kata-kata semangat kepada Irma.
Kotak hitam helikopter mendarat cemas di Pulau Angsa dihantar ke Itali
Kotak hitam helikopter AW139 milik Maritim Malaysia yang melakukan pendaratan cemas di sekitar perairan Pulau Angsa, Kuala Selangor telah dihantar ke Itali.
Leftenan Muda Min Youn satu-satunya penuntut bangsa Cina tamat latihan Komando
Leftenan Muda Chan Ming Youn dari Batalion Kedua Rejimen Renjer Diraja menjadi satu-satunya penuntut berbangsa cina yang berjaya menamatkan Kursus Asas Komando Gerup Gerak Khas (GGK) baru-baru ini.
Kawalan sempadan dipertingkat di sempadan Malaysia-Thailand
Polis Kelantan memantau perkembangan kejadian letupan dan insiden tembak menembak di Sungai Golok awal pagi Isnin dengan meningkatkan kawalan keselamatan di sempadan negara.
Jutaan manusia kagum dengan fenomena gerhana matahari penuh
Fenomena gerhana matahari penuh tidak dapat disaksikan di Malaysia kerana laluan bayang-bayang umbra dan penumbra bulan tidak melalui mana-mana kawasan di Malaysia pada waktu tersebut.
'Selamat Datang ke Bulan' - Pendaratan kapal angkasa berjaya selepas 50 tahun
Robot pendarat berkaki enam digelar Odysseus, berjaya mendarat kira-kira jam 6:23 petang waktu AS di kawah bernama Malapert A.
NASA uji parabola hibrid terima isyarat komunikasi radio dan laser
NASA Menguji Parabola Hibrid Yang Menerima Isyarat Komunikasi Radio Dan Laser
Helikopter Ingenuity tidak lagi boleh terbang di Marikh
HAMPIR tiga tahun lalu helikopter Ingenuity menjadi objek pertama rekaan manusia yang berjaya terbang di planet selain bumi.
Jet ujian X-59 untuk program pesawat penumpang supersonik senyap didedahkan
Sasaran NASA dan Lockheed Martin ialah X-59 menghasilkan bunyi seperti pintu ditutup sahaja pada kelajuan supersonik.
Misi Artemis ke bulan ditangguh ke 2026
Terdapat banyak komponen yang perlu diuji seperti bateri dan litar yang mengawal sistem hayat penting seperti suhu dan kitaran udara.
Misi UAE ke bulan, Marikh bermula
Emiriah Arab Bersatu (UAE) telah mengumumkan penyertaannya dalam membangunkan modul di Stesen Lunar Gateway NASA Artemis bagi menjalankan misi kembali ke bulan dan Marikh.
NASA berjaya hantar isyarat komunikasi laser sejauh 16 juta km
Pada 14 November, isyarat laser dari Psyche dihantar ke bumi yang pada waktu tersebut terletak 16 juta kilometer jauhnya.
Kapsul bawa sampel asteroid mendarat di bumi
Saintis menjangkakan memperoleh sekurang-kurangnya secawan serpihan daripada asteroid yang kaya dengan karbon, dikenali sebagai Bennu.
Berita antarabangsa pilihan sepanjang hari ini
Antara pelbagai berita luar negara yang disiarkan di Astro AWANI, berikut adalah yang paling menjadi tumpuan sepanjang hari ini.