With 85% of its staff gone, LeEco might soon exit India

It has only been four months that Jia Yueting, founder of LeEco, announced that his company was fast running out of cash, and now, as per reports, the company has fired 85% of its India staff, followed by two leadership exits.

Industry experts believe this to be a sign of the start of the end of company’s stint in India.

Also read: Le Eco is now ambitious to reach out to global market

The two leadership exits that the company saw were of Atul Jain, COO of smart electronics business, and Debashish Ghosh, COO for Internet applications, services and content.

In its glorious days, LeEco got the better of rivals like Xiaomi, Oppo and Vivo with an advertising budget as high as Rs 80 crore a month. However, in December, it started withdrawing sales through offline retail stores. A month before that, employees had got a mail from Jia Yueting, in which he said that the firm had burnt cash too quickly in a range of ventures from mobile phones to driverless cars.

Cost cutting was one of the possible solutions mentioned in the mail.

Also read: LeEco goes from massive global launch in the U.S. to cost cutting programs in China to India becoming the company’s future, all in three weeks

As per industry executives, LeEco would exit India because of both the financial crisis at the parent firm and their decision to focus on China and the US. Demonetisation also had a big role to play in the falling sales in the Indian market.

However, LeEco India COO Alex Li denied any plans to exit the market or liquidate stock, stating that it was due to change in strategies that led to the layoffs.

"All businesses need to be profitable to be sustainable. That has been the primary objective in taking certain measures, though the numbers (of layoffs) indicated are incorrect," Li told ET.

It was in last February that LeEco had entered India, and became customers’ favourite because of great deals on smartphones and large-screen LED television sets. All of it was supported by big advertising budget of as much as Rs 80 crore per month, which possibly led to the downfall.

(Image source: Android Headlines)