LeEco says not exiting India, confirms layoffs
- Author: Joey Payne Mar 04, 2017,
Mar 04, 2017, 0:47
Known for attractive handsets like the Le 2 and the Le Max, the company even has its own manufacturing unit set up in the country under the "Make in India" project. The company is said to have had an advertising budget of 80 crores per month, which is quite high compared to OnePlus and Xiaomi. Moreover, LeEco India has a robust R&D team working for India as well as LeEco globally, as the company values the R&D function, as it is integral to long-term business.
When the newspaper asked LeEco India's head about layoffs, its chief operating officer Alex Li said the company has recalibrated and reimagined its business in India since previous year and has taken steps to ensure that the scale of operations is in sync with resources.
According to the news report, LeEco's founder and chief executive officer Jia Yueting in November a year ago had written an e-mail to employees saying the firm had burnt cash too quickly as it expanded into businesses ranging from smartphones to driverless cars.
In the email sent to his employees, Jia wrote "We blindly sped ahead, and our cash demand ballooned".
The company has cut down jobs at its offices in Mumbai and Delhi locations in India and at present it is firing employees at the research and development centres (R&D) in Bengaluru, the report said citing the sources, as saying. Already, the company has lost some of its top executives in India.
"The Indian operations will undoubtedly adopt a laser- sharp focus on overall organisational efficiency, capacity- building and talent nurturing while remaining unwaveringly committed to maintaining a sustainable and profitable business model", LeEco said.
The company's recent moves were well thought out and planned as part of a longer-term strategy for the Indian market, and not triggered by the purported slump in sales due to demonetisation. Though, another senior executive said that company plans to exit India as it is finding it hard to push the products to Indian consumers, and that demonetization has worsened the conditions for LeEco. It's yet to be ascertained if the company has any particular reason behind taking this decision, but for now, it seems like LeEco's future in the country hangs in the balance.
LeEco apparently told ET that they're not exiting the country and that they're scaling back operations inline with their profitability and revenue targets for the year.