It has all gone pear-shaped for Chinese conglomerate LeEco after the firm told nearly 70 per cent of its US staff that their services will no longer be required.
LeEco had around 500 employees in the US, largely based in Silicon Valley. They hired some big-name engineers from competitors, but on Tuesday management announced that 325 staff would be given their marching papers, a day after LeEco's founder Jia Yueting stepped down as CEO.
"The breadth of our business model is capital intensive, and our leadership has been working to secure the appropriate level of funding for the US," LeEco told The Reg.
"While we’ve made progress in growing our distribution channels, the challenges with raising new capital have made it difficult in the past few months to support all of our business’ priorities. As a result, the capital we do have will have to be highly focused resulting in a significant restructuring."
LeEco said will still maintain a foothold in the US, but will focus on selling to the Chinese American community with customized hardware and software, in what it calls "a phased approach to the US market."
In October LeEco, which earned its fortune as the Chinese version of Netflix, announced ambitious plans to take the American market by storm with top-specced TVs and excellent phones at bargain-basement prices, VR goggles, a self-driving car, Android-powered bikes, and a media hosting firm.
It was quite a spectacle and even included a message from big-screen explosion enthusiast Michael Bay, who was using the futuristic LeEco self-driving car in his latest addition to his Transformer oeuvre. But the wheels quickly fell off LeEco's wagon to retail stardom.
Less than a month after its grand introduction the first signs of trouble appeared, with Jia admitting that the company might have over-extended itself. Since a showy Consumer Electronics Show presentation at the start of this year, LeEco has been on a downward trajectory, with its takeover of consumer tech sellers Vizio cancelled and land slated for a Silicon Valley campus sold off.
With Jia out, LeEco is now being run by Liang Jun, a former Lenovo executive who's seen as a safe pair of hands. LeEco's CFO has also resigned, apparently for personal reasons. ®