Update: Debashish Ghosh has confirmed his exit to MediaNama and said that “I left LeEco in the week of 6th Feb itself. Atul left soon after. Regarding employees who have been laid off – I really cannot comment as I have not been with the company for some time now. I don’t think the company is shutting down operations in India. But they will revise their strategy and work with a minimal workforce to drive only device sales.”
Earlier: LeEco has fired 85% of its staff in India, and might be looking to exit the country, according to an Economic Times report. The report mentions that, two top executives, chief operating officer of smart electronics business Atul Jain and chief operating officer for Internet applications, services and content Debashish Ghosh have also resigned from the company. We have written to the company for more details, and will update when we hear back.
Note that in November last 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. At the time, Yueting said that he would slash his income to 1 yuan (15 cents) and slow the company’s pace of expansion. “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,” he said.
LeEco entered India in January last year with two smartphones launches, and in August, setup its first manufacturing facility in Noida with an investment of $5 million. The company also planned to invest $10 million in the country to develop cloud infrastructure for delivering content across mobile devices and smart TVs. In April, LeEco had filed an application with the Foreign Investment Promotion Board (FIPB), seeking approval for opening single brand retail shops and an e-commerce portal in India.
In September last year, LeEco had raised over $1 billion for its electric car division, and said that it would use the funds for building a ‘global electric transportation ecosystem.’ Earlier this year, the company began construction on its planned $3 billion electric car manufacturing facility in China. In July last year, it had acquired US based consumer electronics manufacturer VIZIO for $2 billion. It looks like the company has finally hit the wall, and will have to pause investments and withdraw from certain areas, to keep sustainable.