LeEco Inc. was forced to delay payroll for U.S. employees in March, according to Bloomberg Technology, which spoke to people familiar with the matter. This latest bit of bad news from the embattled Chinese technology conglomerate seems to further confirm that the company is struggling for cash.
It's been a tough go overall for LeEco since the company attempted to make a big splash last October when it launched LeMall, its U.S. e-commerce store. It entered the North American market as a virtual unknown in a highly competitive space, but instead of building up its brand of smartphones, TVs, and other electronics in the new market, the company reportedly continues to struggling financially.
We reported last November how the company's co-founder and CEO Jia Yueting wrote a letter to employees explaining how the company may have "over-extended" itself and was running out of cash. Since then, the company has started falling behind on payments to some suppliers and has struggled to maintain its premium sports broadcasting rights.
While Jia has been able to raise some capital amongst some Chinese investors, Bloomberg reports that its plans to expand into the U.S. — including its tentative deal to acquire California TV manufacturer Vizio — continues to hit roadblocks:
Jia has aggressively chased funding and attempted to establish a foothold in the U.S. But those efforts may be faltering. A proposed $2 billion acquisition of California TV maker Vizio Inc. is being held up by tighter controls on Chinese currency outflows, according to a person familiar with the matter, and as reported in Chinese media. That deal was intended to create a beachhead for branding and acquiring American customers. LeEco is now exploring other options, including taking a minority stake in or partnering with Vizio, the person said.
This latest bit of news certainly fits within the narrative of LeEco's continuing struggles in North America. In October 2016, Jia confirmed that the company had at least 500 U.S. employees who may have been affected by this payroll delay.