Update: LeEco announced that it will lay off 325 employees in the U.S., citing a lack of funding. The company will now focus on delivering content to Chinese-speaking households in the U.S. In a statement, LeEco said:
Original story follows:
LeEco's debut in the U.S. didn't go according to plan, and it looks like the company is gearing up for a round of massive layoffs. Earlier this week, LeEco founder Jia Yueting announced he would step down as CEO of Leshi Internet Information & Technology Corp Beijing, the company's publicly listed unit.
Anonymous sources confirmed to CNBC that the Chinese company will lay off over 85% of its U.S. workforce at townhall meetings scheduled at its offices across the country:
According to the publication, LeEco will turn its attention to getting "Chinese-American consumers to watch LeEco's Chinese content library" in the U.S. As for Yueting, he'll continue to be the chairman and CEO of LeEco, but Leshi will be run by former Lenovo executive Liang Jun. Yueting said that the restructuring will improve "the listed company's performance," freeing up his resources to focus on "governance, strategic planning and core product innovation" of LeEco.
Most of LeEco's troubles stemmed from its expansion to the U.S. The resulting cash crunch has led to a series of layoffs in global markets including India, and delayed payments to staff in the U.S.. The company picked up a $2.4 billion investment at the start of the year, but its bid to acquire Vizio fell through.
Harish Jonnalagadda is a Senior Editor overseeing Asia at Android Central. He leads the site's coverage of Chinese phone brands, contributing to reviews, features, and buying guides. He also writes about storage servers, audio products, and the semiconductor industry. Contact him on Twitter at @chunkynerd.
Ouch, and even worse for people working here since the locations are in three of the highest cost places to live here in California. This is why I got out of tech. The margins are way to low and people are the first to go.
Completely agree. I loved working in that industry, but it's too volatile.
I was considering getting a LeEco TV recently, but reconsidered because of their financial woes. I didn't want to get a TV with no support if something broke soon after.
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