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LeEco said to miss US sales forecasts, plan more job cuts

Updated: 2017-04-12 09:48
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Chinese technology conglomerate LeEco Inc is sharply scaling back its US ambitions.

The company-which oversees a range of businesses in China, from streaming video to smartphones to electric cars-missed its projections for 2016 sales in the US by a wide margin and is planning to cut more than a third of its US workforce, a person familiar with the matter said.

Billionaire Jia Yueting is narrowing his vision for LeEco's global expansion amid lackluster sales and the prospect of a cash crunch. The company entered the North American market in October with a splashy event in San Francisco, where it showed off an array of products, including ultra high-definition televisions, phones, virtual reality goggles and electric bikes. Yet LeEco generated US revenue of less than $15 million last year after that October debut, compared with an original goal of $100 million, according to the person.

The company so far is only selling TVs, smartphones and some accessories in the US. The US unit is also making plans to eliminate about 175 jobs, which would shrink its staff in the country to about 300 people, said the person, who asked not to be named because the financial details aren't public.

LeEco declined to comment on the planned job cuts and revenue miss.

On Monday, the company said it was abandoning its plan to acquire US TV maker Vizio Inc for $2 billion, citing regulatory hurdles. The collapse of the deal, which was meant to give LeEco a beachhead to build its brand with US customers, sets LeEco even further back in the US. The two companies said they instead will collaborate on ways to bring Vizio's products to the China market and integrate LeEco's content into Vizio's platform.

Bloomberg

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