Jia Yueting, the company’s co-founder, broke the news in a letter to LeEco employees, saying he would reduce his annual salary to 1 yuan, or about 15 cents. The company’s expansion to the U.S. and other countries will also slow down and become more moderate.
“No company has had such an experience, a simultaneous time in ice and fire,” Jia wrote in the letter, according to Bloomberg. “We blindly sped ahead, and our cash demand ballooned. We got overextended in our global strategy. At the same time, our capital and resources were in fact limited.”
LeEco, often touted as the “Netflix of China,” has a large presence in its home country. The company recently acquired Vizio, and has fingers in various product categories such as electric bikes, smartphones, TVs, and more.
The letter by Jia apologized to shareholders, and said LeEco will start cutting funding for programs and focus on current businesses to “catch up to the growing need for cash,” rather than venturing into new ones.
“We are starting to see signs of big company disease, such as low individual performance and organizational redundancies,” he said in the letter. “Our fundraising ability isn’t strong. The scale of our external fundraising had trouble satisfying the demands of our rapid expansion.”
Jia says he will focus more on LeTV, and the company may incorporate other businesses into the streaming service. LeEco also had plans to build electric car plants in China and in the U.S., but it looks like those projects may be on hold for the time being.
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