LeEco’s chief operating officer Atul Jain and chief operating officer for content Debashish Ghosh both resigned from the firm, according to an Indian Express report. Not only this, if industry reports are to be believed, the Chinese conglomerate has also fired 85 per cent of its staff and plans to quit India soon. However, when Indianexpress.com contacted the company the leEco spokesperson did not confirm if the company had indeed fired 85 per cent of its staff and said that it was not going to quit the Indian market.
LeEco launched its handsets in India in January last year. Focusing their smartphones around the content they tied up with Eros International. But it didn’t turn out to be in favor of LeEco and they had to end the tie-up. Unlike China, where content remains restricted, India has open access to platforms like YouTube, Facebook, Netflix, Amazon Prime Video, etc which makes it harder for one player to dominate content. Its smartphones LeEco Le 1 and LeEco Le 2 also failed to boost the company’s fortunes in India. Players like Xiaomi, Oppo are making significant gains in India but LeEco wasn’t able to taste the same success.
According to November’s Bloomberg report, the Chinese firm’s chairman Jia Yueting had written a letter to shareholders, investors admitting there was trouble in the company and it is fast running out of cash to sustain a headlong rush into businesses from electric cars to smartphones. In a letter to employees, Jia Yueting apologized to shareholders and pledged to slash his income to 1 yuan. “No company has had such an experience, a simultaneous time in ice and fire,” Jia wrote. “We blindly sped ahead, and our cash demand ballooned. We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited.”
Recently, LeEco secured a new round of investment worth 15.04 billion yuan ($2.2 billion) from property developer Sunac China Holdings. Sunac, through its real estate subsidiary Sunac Real Estate, said on Friday it plans to invest 6.04 billion yuan in LeEco’s Shenzhen-listed unit Leshi Internet Information and Technology Corp Beijing, by acquiring an 8.61 percent stake.
The company also entered the US market recently. With both its leading executives resigning, is the company facing an uncertain future in India?