China's LeEco clarifies it's not in 'wind-up' mode in India

An Economic Times article today reported that Chinese conglomerate LeEco has fired 85 percent of its employees in India and may be looking to exit the country. It added that layoffs follow the resignation of its smart electronics business Chief Operating Officer Atul Jain and internet applications, service and content business Chief Operating Officer Debashish Ghosh.However, in a clarifiation to Moneycontrol, the company said, in view of future plans lined up for India, it is not 'in wind-up mode.'"The company is gearing up for the launch of its next generation TV scheduled the coming week. Premium models of smartphones too are to follow. LeEco television and smartphone business continues in India and has gained significant market recognition," said a company note.LeEco is global internet company which sells smartphones in India. Regarding layoffs, the company further added that LeEco India has 'optimised its organisation, to emerge as a more flexible and efficient operation to cope with the tough competitive market scenario in India." Late last year, LeEco’s billionaire owner Jia Yueting, who was also the largest shareholder of Coolpad group, had admitted in a long letter to employees that LeEco was running out of cash.

"We blindly sped ahead, and our cash demand ballooned," he had said in the letter as per media reports. To overcome the cash crunch, reports suggested, Yueting planned to cut his annual income, trim growth target to modest levels, and slow down on expansions.

With advertising budget at a hefty Rs 80-crore per month, the company which outpaced Xiaomi, Oppo and Vivo, had exited sales through offline retail stores in December.

Both the Mumbai and Delhi offices of the company are said to be left with minimal staff, while firings are on in its Bengaluru research and development centres.

While confirming the exit of the two top executives, India Chief Operating Officer Alex Li denied any plans to exit the country.Even as Li denied much impact on sales from demonetisation, another senior executive, with a marketplace doing business with LeEco, said on conditions of anonymity that the company plans to exit India as it is finding it tough to find a winning formula, and demonetisation has worsened matters.