LeEco Closing Down Indian Operations? 85% Employees Fired, Senior Leaders Exit The Company
LeEco, the Chinese business conglomerate having interests in automobiles, bicycles, mobile phones, televisions, film productions, virtual reality, is reportedly closing down Indian operations. Founded by Chinese billionaire Jia Yueting, LeEco has actually fired 370 employees, which form 85% of their overall strength in India.
Staffs from marketing and sales from Delhi and Mumbai locations have been fired, and only a skeleton staff is running the show. Research and Development employees from Bangalore can remain employed because they are working for US operations as well.
Here are 3 strong indications which gives us a hint that Indian operations of LeEco may end, very soon:
Cash Running Out
After their Indian launch last year, LeEco shocked everyone with their brazen marketing spend, both online and offline. With an average spend of Rs 80 crore every month for marketing related activities, LeEco actually overtook Xiaomi and Oppo in their marketing expenditure. Last year, founder Jia Yueting admitted that they are running out of cash, even as he cut his salary to 15 cents. Last year in December, they stopped retail sales in offline locations, and now, they are on the verge of complete shut down in India.
Senior Leaders Quit
When such a trouble brews up, senior management leaders are the first to quit. And precisely that is happening with LeEco. Atul Jain, who was the COO of Electronics business and Debashish Ghosh, COO of Applications, Services and Content, have already left. This is one strong signal that LeEco’s Indian operations are indeed under fire.
Another set of reports indicate that demonetization had a very negative impact on the overall sales of LeEco’s flagship models, and the shock was too massive to ignore. A senior executive working with a leading e-commerce portal, which partnered with LeEco for their Indian entry has confirmed this fact.
Diluting Focus, Spreading Too Thin
Within India, LeEco spread themselves too thin, by diluting their focus everywhere. Not only they were selling medium-range smartphones, but also initiated their sales and marketing campaign for high-end LED TVs besides researching into driverless cars. Branding focus was missing, and Rs 80 crore marketing blitz couldn’t help their cause. Amidst myriad smartphone brands and electronics giants, LeEco simply couldn’t carve out its niche. That unnamed executive from e-commerce portal said, “Xiaomi is strong online and Oppo-Vivo offline. So, LeEco found it neither here nor there,”. As per reports, LeEco will redraw their strategy, and focus entirely on US and China market, where they have been performing relatively well. India is simply out of their focus now.
LeEco India’s CEO Alex Li has denied that they are shutting down Indian operations, and he also denied the count of employees which are being fired. He said, “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,”
But, we can read between the lines here.
If you are a LeEco employee or a distributor who has worked with LeEco, then do let us know the ground realities, by commenting right here.
We will keep you updated as more details come in..