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China's troubled LeEco said to plan cutting most of US workers

Tuesday, May 23, 2017 - 10:38

LeEco.jpg
This week, the company announced that billionaire Jia Yueting would relinquish the day-to-day running of his flagship video service based in China, while parent company LeEco considers an internal overhaul that will group businesses from entertainment to TVs under its main listed company. The internet giant has grappled with fund-raising difficulties and unpaid bills in past months, a cash squeeze exacerbated by rapid expansion beyond online video into costly areas from sports broadcasting and electric cars to online finance.

[NEW YORK] Chinese technology conglomerate LeEco plans to lay off more than 300 employees in the US, reducing the headcount to about 50 people, according to a person familiar with the matter.

The employees left at the whittled-down US business will service customers who have already purchased LeEco devices, the person said, asking not to be named because the cuts aren't yet public. The layoffs sharply scale back the company's ambitions in North America, where it made a splashy debut in October. At the time, the company showed off an array of products it planned to sell in the US, including high-definition televisions, phones, virtual reality goggles and electric bikes. Bloomberg News reported in April that it missed revenue targets by a wide margin and was planning major job cuts.

LeEco didn't immediately return phone calls seeking comment.

The troubles extend far beyond LeEco's US operations. This week, the company announced that billionaire Jia Yueting would relinquish the day-to-day running of his flagship video service based in China, while parent company LeEco considers an internal overhaul that will group businesses from entertainment to TVs under its main listed company. The internet giant has grappled with fund-raising difficulties and unpaid bills in past months, a cash squeeze exacerbated by rapid expansion beyond online video into costly areas from sports broadcasting and electric cars to online finance.

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Mr Jia's efforts to establish a foothold in the US have already faltered. A proposed US$2 billion acquisition of California TV maker Vizio Inc was scrapped in April. That deal was intended to create a beachhead for branding and acquiring US customers. The US operation has also suffered from an exodus of executives and growing frustration amid rounds of layoffs and delayed payroll.

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