The South African Department of Labor’s decision to sue the local subsidiary of the Chinese mobile technology giant Huawei for hiring too many foreign workers could signal a wider crackdown on foreign firms. This comes as the country’s unemployment rate soars and pressure to allocate jobs to South Africans reaches a boiling point.

The lawsuit is reportedly going ahead after talks between Huawei South Africa and the South African government broke down. The government is accusing the Chinese company of breaking employment equity regulations that require foreign companies to hire at least 60% local workers. It alleges that Huawei South Africa’s workforce is 90% foreign. The breach was revealed by a 2020 labor audit, after which the company reportedly tried to find an amicable solution. However, talks seem to have failed and the department said its lawsuit is going ahead because the company took no steps to rebalance its hiring.