LeEco fires 85% staff of Indian unit, may exit India

Miranda GreerMar 04, 2017

The company may be looking to exit the country. The company, which had a massive advertising budget of Rs. 80 crore a month, stopped selling its products through offline retail stores in December. Regarding the layoffs, Li stated that the company has reimagined and recalibrated its business in the country since 2016 and has taken the necessary steps to make sure that the operations are in sync with the resources.

According to a new report, Chinese giant, LeEco, is contemplating an exit from the Indian smartphone market.

The layoffs were initially reported by India's Economic Times, which claimed that 85 percent of staff had exited as a precursor to LeEco's total withdrawal from the domestic market.

LeEco, the Chinese smartphone and electronics brand which entered the Indian market a year ago, has reportedly laid off 75% of its Indian staff.

Note that in November previous year, LeEco's co-founder Jia Yueting said that the company was running out of cash in its bid to expand its businesses from electric cars to smartphones. "We blindly sped ahead, and our cash demand ballooned". He also opposed that the slump in sales had anything to do with demonetisation.

LeEco's Mumbai and Delhi offices are currently running with a skeletal staff, while the company is now firing people in its Bengaluru office.

Alex Li, Chief Operating Officer, LeEco India said, "All businesses need to be profitable to be sustainable".

The smartphone maker made a big splash in India previous year when it launched a range of smartphones, TVs and content services alongside a lavish advertising campaign. Two of its top executives in India have also quit, a spokesperson told BloombergQuint. However, a senior executive with aleading ecommerce marketplace that does business with LeEco said the company is preparing to exit India as it has been struggling to find a winning formula, with demonetisation further hurting sales. "So, LeEco found it neither here nor there", he said, requesting anonymity.

As per industry executives, LeEco would exit India because of both the financial crisis at the parent firm and their decision to focus on China and the US.

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