Four months back owner Jia Yueting had admitted in a long letter that the company was fast running out of cash.
In a major setback, Chinese conglomerate LeEco has fired 85% of its employees in India, reported The Economic Times.
This has occurred four months after billionaire owner Jia Yueting acknowledged and admitted in a long letter that the company was fast running out of cash. It closely follows on the lines of the resignation of its smart electronics business Chief Operating Officer Atul Jain and Internet applications service and content business Chief Operating Officer Debashish Ghosh.
Industry executives have attributed the exit to the financial crisis at the parent firm and its decision to focus on China and US. The demonetization announcement in November added more pressure and hastened the decision.
The company's office in Mumbai and Delhi are said to be left with a minimal staff and the company is now firing people at its research and development centres in Bengaluru.
"We blindly sped ahead, and our cash demand ballooned," he had said in the letter as per media reports. To overcome the cash crunch, Yueting planned to cut his annual income, trim growth target to modest levels, and slow down on expansions.
Alex Li, chief operating officer in India confirmed the departure of the two aforementioned top executives, but denied plans to exit the market or liquidate stock.
"All businesses need to be profitable to be sustainable. That has been the primary objective in taking certain measures, though the numbers (of layoffs) indicated are incorrect,” he said.
LeEco had entered the Indian market last February in a partnership with Flipkart spending a hefty amount of Rs 80 crore every month on advertising and offering deals for smartphones and LED television sets.
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