LeEco is downsizing operations as it looks to revamp strategy for 2017.
LeEco hasn’t fared well in recent months, and the company is now planning layoffs in several markets on account of the “overall volatility and uncertainty that is forecast for the global economy.” LeEco will downsize its operations in “all its offices in various geographies,” including India. Toward that effect, LeEco is suspending its plans to sell phones offline via retail stores in the country, slashing its advertising budget, and slowing down new product launches.
In the statement provided to Gadgets 360, LeEco affirmed that the layoffs were not due to “performance or competence parameters but entirely guided by business imperatives.” The company said that it was “open to offering outplacement services to affected employees who specifically seek assistance:”
As we transit to a more strategic phase of our operations in India, it is the appropriate time to assess and take steps to ensure the sustainability and profitability of our business.
Following its over-the-top launch in the U.S., LeEco CEO admitted to a cash crunch, stating that the company “blindly sped ahead” and “over-extended” itself.
Since then, the company raised $600 million in fresh funding, with $300 million earmarked for its electric car business.
LeEco’s business model relies on selling phones and TVs at manufacturing cost, with the company turning to its digital content subscription pass — LeEco EcoPass — for profits. But as we’ve seen, the subscription pass in and of itself doesn’t justify buying the company’s products.
