Update #2, May 23: According to CNET, LeEco plans on cutting 325 employees in all, or roughly 70 percent of its US workforce.
CNBC later received word that company executives held Town Hall meetings in three separate U.S. locations Tuesday morning. During the meetings, LeEco execs apologized to employees and tried to get them to “remember the good times,” later discussing the new “LeEco 2.0” strategy. Following the Town Hall meetings, employees were split into departmental meetings where they learned their fates.
We will be sure to update you as this story develops, and we wish the best of luck to the employees and families affected by this news.
Update #1, May 23: The troubles are far from over for embattled LeEco. Soon after the announcement that founder Jia Yueting would step down from the helm of the company, CNBC reported that the US unit of LeEco would be gutted through mass layoffs that would see 90% of the workforce laid off. The layoffs will be announced at an all-hands meeting that has been called for today, sources said. It looks like LeEco will also “refocus” its US operation to marketing its Chinese language content catalog to Chinese-Americans.
Original post, May 22: LeEco founder Jia Yueting has stepped down from his position CEO of Leshi Internet Information and Technology Corp., the company’s main publicly listed unit, according to a report from Reuters. The move comes as part of a wider restructuring aiming to address the business’ recent cash-flow problems.
Jia will be replaced by Liang Jun, a former Lenovo executive who joined Leshi — also known as Le.com — in 2012, while chief financial officer Yang Lijie, who resigned due to personal reasons, will be replaced by Zhang Wei.
In a LeEco staff letter seen by Reuters, Jia said the two new appointments were the “Most important milestone since its IPO in 2010.” Jia will remain as the chairman of Leshi and the CEO of the broader LeEco group.
This news follows a number of LeEco setbacks in the last few months, said to have stemmed from the rapid expansion of the company. LeEco recently canceled its attempt to acquire US TV manufacturer Vizio, shut down its Eco Pass TV streaming service, reportedly failed to pay workers on time and laid off staff in India and the US, and was said to be selling the Silicon Valley plot of land it bought to aid its US expansion. But apart from that everything is going pretty well for the company.
LeEco’s troubles aren’t behind it quite yet, but a restructuring seems like it could be a step in the right direction for the Chinese conglomerate.