The Chinese company LeEco declared four months ago that the firm is running out of cash. Thus, LeEco took the decision of firing 85% of the Indian unit staff. Right now, recent reports suggested the company might also exit India. Finally, LeEco confirms, it has no plans to exit India t the moment.
The two top executives of the enterprise already resigned. Atul Jain, the COO of smart electronics and also Debashish Ghosh, the COO for Internet applications, services, and content, already resigned. Well, we didn’t expect such shortage of cash from the emerging smartphone company.
LeEco outranked Xiaomi, Oppo, and Vivo in the advertising budget. The advertisement budget of LeEco was 80 crores more than the above three companies. Apart from Letv mobile, the LeTV was also performing well. Suddenly, the condition of the company became such that it had to drop sales from offline stores.
An uncalculated move from LeEco
In last year’s November, Jia Yueting emailed a lot of the employees saying the firm exhausted all of the cash. The reason was, it expanded the business from smartphones to driverless cars. Jia Yueting, the founder of LeEco acknowledged the company’s global expansion strategy went too far with limited capital resources.
Thus, it is cutting costs to enhance the efficiencies. Jobs in both Mumbai and Delhi were cut off. In Delhi office, only the skeletal staff is working. At present, the company is firing research and development employees from Bangalore.
Is it exiting India?
Under such circumstances, there were chances the company might exit India. When LeEco was contacted, the Chief Operating Officer Alex Li denied any plans for exiting India. He also mentioned the company is going to recalibrate and make sure the operations are in sync with the resources. He clarifies; none of this was triggered due to demonetization.
The company also has new plans and models in the store. In a clear statement on 3rd March, the company said, [quotes quotes_style=”bquotes” quotes_pos=”center”]India is one of the most strategic markets for LeEco and hence does not have any exit plan. In the past one year, LeEco India has gained market recognition, and the initial stage of market seeding has been successful.[/quotes]
One more shocking news is, the company is also gearing up for the launch of next-gen Letv in coming weeks. The premium models of smartphones from LeEco will follow up this year. These signals clearly indicate the company is not planning to wind up from India. Still, there are some speculations from industry experts which say the company is liquidating their stock. Since the official statements say the company is not leaving India, we can surely say the company will not leave India at least right now.