LeEco isn’t very well-known in the Western world, despite the fact that it has business investments in everything from movies, to smartphones, to electric cars. Unfortunately, it seems like the company’s recent expansion into the US may be cut short, as it’s CEO is announcing cutbacks and limits on spending.
We’ve mostly covered LeEco because of their penchant for releasing affordable, but well-specced smartphones. Like many other companies, LeEco has made a name for itself in this market that’s constantly looking for more affordable products. However, unlike say Xiaomi or OnePlus, LeEco has much grander ambitions. It recently unveiled concepts for an electric autonomous car, and it purchased Vizio for $2bn, as well as setting up headquarters in Silicon Valley.
But all of that optimism for the future seems to have hit the hard wall of reality, as Jia Yueting, the company’s CEO, announced LeEco was running out of money. Shares from some affiliated companies took a sharp tumble when the CEO’s letter to employees, where he details recent missteps, became public.
Jia funded LeEco back in 2002, but now he’s saying that the company “blindly sped ahead”. He explained:
No company has had such an experience of being caught in both ice and fire. We overextended our global strategy and spent recklessly on expanding our business scale when our capital and resources were in fact limited. LeEco will quit the expansion strategy at the cost of burning money ... and instead focus on the existing market.
Jia announced that he will limit his own salary to 15 cents per year. While an honorable move, you shouldn’t worry too much about his well-being. Jia joins the ranks of Mark Zuckerberg and Elon Musk who take pennies as salary from their own companies, but have billions of dollars in personal assets to fall back on.
Jia ended the letter saying the future will be better for LeEco, but given the intense competition on the global technology market, that remains to be seen.
Source: CNN