Things aren’t working out for China’s conglomerate.
LeEco may soon exit its India operation, less than an year and half after the company entered the country. The companys top level executives in the country have resigned and the vast majority of staff has been laid off, according to a former employee.
LeEco entered India in January last year with a range of smartphones and attempted to replicate Xiaomis business model for success in the country. The company’s Le 1s handset, which sports a 5.5-inch display and 3GB of RAM, created buzz in the market. The smartphone was priced at Rs 10,999 ($165).
Later in the year, LeEco launched a pool of smart TVs in India, beating several other Chinese companies including Xiaomi that have long shown desires to bring their low-cost 4K TV models in the country.
At the time, employees in the LeEco TV division, many of whom had been poached from Samsung, Panasonic, and LG, were happy with the pace at which things were progressing.
LeEco was offering its TV to users with a yearly content subscription. It had partnered with several local giants including Eros, and according to two people familiar the matter, it was in talks with Netflix to add the global giants offering into the mix as well. When asked about this, Netflix and LeEco declined to comment last year.
Xiaomi, which had a great 2016 in India, plans to bring its TV to the country, too, however, the company is not rushing without putting a firm content ecosystem in place, according to an industry source.
However, things took an ugly turn by the waning part of the year for LeEco. By November, it had hit a break to hiring more people, and by December, it had begun to let go off Indian staff. Also the company ended its agreement with Eros, a former employee said, and still owes millions in debt to many media houses for event hosting, and other partnerships, the person added.
In December, LeEco’s top-level executives in India Atul Jain, COO of strategies and India head, and Debashish Ghosh, COO of Internet platform, services and content business, had been asked to resign. They did, shortly afterwards, though neither have reflected that in their LinkedIn profiles.
In the meanwhile, LeEco had also started laying off its India staff, the headcount of which was north of 500, according to a person familiar with the matter. By January, 60 percent of the staff had been let go, most without any severance package. The Economic Times reported on Friday that 85 percent of LeEco’s India staff has been laid off so far.
Former employees of the company who spoke to Mashable India on the condition of anonymity are puzzled with the development, too. “They were hiring aggressively in the early last year, and by the end of it, began to fire people left and right,” one person said.
One employee said the company is feeling financial heat. In November last year, Jia Yueting, a founder of LeEco apologised to shareholders for poor revenue. No company has had such an experience, a simultaneous time in ice and fire,” he wrote to shareholders.
It appears more than likely that LeEco will exit its operations in India, and a former employee said the company hasn’t figured out who will be in charge of the after-sales experience for its products in the country.
The general consensus among many we spoke to is that LeEco bit more than it could chew. The company also has shown strong desires to sell its smartphones and TVs in the United States. It’s also building an electric car, but recent reports suggest that those efforts aren’t going well either.