It looks like LeEco’s big bet on expansion into the U.S. may not have paid off in quite the manner the company expected. The Chinese firm is reportedly prepping for a massive round of layoffs on Tuesday, May 23, according to a report from CNBC.
The report notes that only 60 percent of the company’s U.S. workforce will be left after the round of cuts. According to CNBC’s source, its current U.S. workforce sits in at over 500 employees. The report also cites an email calling employees to a “Town Hall” meeting that is supposed to occur at its locations in San Diego, San Jose, and Santa Monica, all in California, and that all employees are being told to attend unless they have pre-approved time off.
So what will LeEco do after the layoffs? The company will reportedly focus on launching products aimed at Chinese-American customers, who might want to continue watching its Chinese content library while they’re in the U.S.
It’s unclear what this means, if anything, for LeEco’s investments into Faraday Future, though reports note that its investment will likely continue.
LeEco was first founded in China as a streaming service, but it soon hoped to start expanding into the U.S. by offering hardware that links customers to its content. When it first announced its big move into the U.S., it offered a range of smartphones and smart TVs, all of which offered flagship-level specifications at a reasonable price. The goal here was to make money back through its content — a plan which apparently turned out not to work.
LeEco is going through a turbulent time otherwise, too — Jia Yueting stepped down as CEO of LeEco’s publicly traded arm, Leshi, though he will stay on as chairman.
None of the news is all that surprising. Jia admitted in an interview with QQ last year that the company had expanded too hastily and was suffering through a cash crunch.