LeEco entered the Indian market in January of 2016 and began a whirlwind marketing campaign that saw it spend up to around Rs 80 crore (almost $12,000,000) a month, a move that may have cost the country its business in India altogether. It’s been reported that the company has laid off 85% of its staff in India and has also seen two of its senior executives leave the company, prompting many to believe that the company may be planning to exit the Indian market in the coming months.
Many of the layoffs are from the company’s Mumbai and Delhi offices as well as its research and development centers in Bengaluru. Two top executives – Atul Jain, chief operating officer of smart electronics business, and Debashish Ghosh, chief operating officer for Internet applications, services and content – have also resigned from the company. There is speculation that the two offices will eventually be closed while the R&D center may be kept open longer as it also serves the company’s US branch.
The reason for the layoffs may be due to the company’s current financial crisis as it has been struggling with cash for a while now. Company CEO Yueting Jia announced late last year that the company was fast running out of funds as it found itself spending and expanding too quickly, from selling smartphones to driverless cars, in spite of limited capital and resources. The layoffs could be a move to lessen the company’s expenses and give it time to recuperate.
Whether LeEco will eventually choose to completely exit the Indian market is still unknown but if things don’t turn around for the company soon, it may not have a choice.