In the face of mounting financial problems that show little signs of abating, Chinese tech company, LeEco, is now expected to scale back its operations in the U.S., according to a report from Bloomberg News. The company is also said to have plans to lay off more than a third of its employees in the country, as it attempts to restructure its business in an effort to get back to profitability. LeEco currently employs around 475 people in the U.S., but is planning to make around 175 of those positions redundant in the coming weeks, thereby shrinking its employee base in the country to about 300. The company had entered the U.S. market last year with much fanfare, but is believed to have missed sales projections "by a wide margin".
Often called the 'Netflix of China' because of its LeTV streaming services, LeEco had apparently expected to earn revenues of around $100 million in the U.S. last year, but managed barely $15 million, having entered the country last October with a range of smart televisions, smartphones, VR headsets and electric bikes. The company has also scaled back its operations in India over the past few months following rising concerns over the company's future owing to an ongoing cash crunch. LeEco entered India back in 2015 trying to emulate the stellar success of Xiaomi in the world's third-largest smartphone market, but is yet to make the same sort of impact in the country. That being the case, LeEco has not only reduced its product portfolio in India, but also cut a large number of jobs, leading to widespread speculation about the company's future.
With his company facing massive financial hurdles, LeEco's billionaire chairman and co-founder, Mr. Jia Yueting, admitted late last year that the company's expansion efforts had "gone too far", and apologized to his shareholders and employees for putting them in this unenviable situation. The company had also reportedly bought a 49-acre property in Santa Clara from Yahoo for $250 million last year with a view towards building a large R&D center in the Silicon Valley, but those plans have now apparently been shelved, according to sources quoted by Bloomberg. More recently, the company's much talked-about plans to acquire U.S. TV-maker VIZIO fell through earlier this week owing to "regulatory headwinds", although, the two companies have vowed to "continue to explore opportunities" to collaborate on future projects.