LeEco To Lay Off 70 Percent Of Its US Employees, Refocus On China

Chinese internet conglomerate LeEco plans to lay off 70 percent of its U.S. staff this week as the company backs away from plans to enter the U.S. market, CNET reported.

The company plans to cut around 325 of its 500 U.S. staffers. LeEco’s U.S. employees are largely focused on selling consumer electronics and TV programming, and the cuts come as LeEco aims to re-emphasize its digital offerings and its Chinese market.

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Within the past few years, LeEco expanded significantly from its initial roots as a Netflix-like option for streaming video for Chinese users. The company made aggressive plans for acquisitions and partnerships in secondary fields like automotive development, smartphones and TV hardware but plans to back away from many of these initial moves.

The U.S. layoffs also come at the same time as cuts to other LeEco divisions. As the China Business Journal previously reported, other LeEco divisions will see significant layoffs in an attempt to streamline operating costs.

LeEco's marketing and branding departments will be reduced from 100 employees to 30 while the company's sales team will be cut by half. Elsewhere, LeEco's LeSports sports streaming service will keep 200 of its current 700 employees, and parent company Le.com is expected to lay off 10 percent of its staffers.

The turmoil at LeEco could extend to its head, CEO and billionaire Jia Yueting. Jia stepped down Sunday from LeEco’s main Leshi Internet Information & Technology Corp.'s Beijing business amid concerns about the company’s direction.

In the press, Jia has taken an aggressive stance toward LeEco’s competitors. In interviews last April, he dismissed Apple’s current products as “outdated” and declared LeEco’s self-driving car research would be better than Tesla’s. A source told Reuters LeEco plans to focus more heavily on the Chinese market and its TV content, but hinted the company’s executive staff is now under more scrutiny.

"If the company does not right itself, then I think you can see the company will have a complete management shake-up, including (Jia) Yueting's core team," the source told Reuters.

Read: Faraday Future Unveils Flagship Electric FF 91

Among its U.S. investments, LeEco also played a major role as an investor in self-driving car company Faraday Future. The autonomous electric car startup showcased its long-in-development FF 91 car at CES 2017 earlier this year and Jia joined Faraday Future executives onstage at the press event.

However, LeEco’s long-term future with the troubled auto manufacturer may be in doubt as a result of its financial cuts. CNBC reported the company is considering re-evaluating its investments in Faraday.