Leshi Holdings, or better known simply as LeEco, has been going through a rough patch as of late, especially after the founder of the company, Jie Yuting penned a letter to his staff, stating that the company is running low on resources and is suffering from expanding too fast in too many directions. Well, when a letter like that from the chief executive is put out to employees, it is almost never a good sign. Now, there have been rumors going around stating that LeEco is laying off employees.
Rumors regarding the layoff were first ignited when an image of purported LeEco employees queuing up first surfaced on Weibo, a popular Chinese social media platform. It has been reported that the employees were queuing up at the company’s Human Resource center and that about 1,400 LeEco employees have been asked to leave the company. This is the result of an organizational restructuring program which the company is currently going through. The divisions which are said to be affected by the massive layoff include the mobile sector as well as the media division. Sources have also reported that the sports editor for the media division has already handed in his resignation. LeEco’s stock took a hit after rumors regarding the layoff were spread, with the company’s stock price dropping a record 9.9 percent to 35.01 Yuan per share. However, its shares bounced back later on to close at 35.80 Yuan per share. Earlier today, LeEco’s stock was suspended temporarily and Jie Yuting announced that the suspension was due to the new round of funding the company is currently going through.
Just two months back, LeEco entered the US market and did so with a lavish coming out party in San Francisco. The group is the fastest-growing smartphone manufacturer in the world and it will be the eleventh largest vendor in the world this year. Formed in 2010, the group entered the smartphone market in 2015, selling its devices domestically at first. This year, LeEco entered the Indian smartphone market where its handsets have been a hit and usually sells out quickly when flash sales are held. The company is also planning to enter the electric car sector and has ambitions to usurp Tesla Motors, which is one of the largest manufacturer of electric cars.