It’s hard to know where to begin with this mess. It’s only been seven months since LeEco launched in the U.S. with one of the most bizarre press conferences in recent memory, right down to the super weird Michael Bay cameo.
Since then, it’s been a constant parade of bad news for the company, cumulating with a conference call today that will lead to around 325 layoffs in the US alone.
The company confirmed as much with a statement that’s still stubbornly optimistic about its future in the States, writing in part,
While we’ve made progress in growing our distribution channels, the challenges with raising new capital have made it difficult in the past few months to support all of our business’ priorities. As a result, the capital we do have will have to be highly focused resulting in a significant restructuring and streamlining of our business, operations and workforce. This will impact approximately 325 people in the U.S.
It’s the culmination of an on-going shitshow that isn’t likely to end any time soon. The full list of red flags is too long to labor over here, but consider this a bit of a greatest hits. Of special note are the recent resignation of CEO and founder Jia Yueting, its decision not to purchase Vizio after all and a big rethink of that giant swath of land it bought from Yahoo in the Silicon Valley.
So, what’s going on with LeEco? The consensus from pretty much the start is the Chinese brand flew much too close the sun. It’s hard to watch that press conference from back in October and not come to the same conclusion. Tackling either the U.S. smartphone or TV market would have been an uphill climb in and of itself, so LeEco’s executives just said “screw it, we’re taking on everyone.”
The event included the announcement of several phones, TVs, a streaming media service, an electric car, a bicycle and a VR headset among others, launched with all the grace and panache you’d expect from an event that listed the consummate Transformers auteur among its credits.
Now, after appearing to have backed away from India in a big way, the company looks to be near packing up its things and going home here in the US, as well. Or rather, it has regressed to much more measured baby steps, focusing on a toehold it should have played into in the first place: Chinese-speaking households here in the States.
The company didn’t distinguish itself much on the hardware front, but it’s always had one key thing going for it: a breadth of Chinese language programming available through its service that many have deemed to be, “the Netflix of China.”
The statement continues,
Our goal is to continue to gain momentum. In the past few months, we have gained a large foothold in Chinese-speaking households in the U.S. by offering tailor-made products and content for this community. We believe this provides us an opportunity to build on our strengths and grow from there.
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