Winston Cheng, Senior Vice President and Global Head of Corporate Finance and Development at LeEco is leaving the Chinese tech giant amidst a major cash crunch, sources close to the company told Bloomberg on Friday. Following a two-year stint with LeEco, Cheng is now reportedly set to join Jingdong Mall, a Beijing-based eCommerce giant at which he’ll take the role of President of International, managing mergers, acquisitions, and foreign investments. Both LeEco and Jingdong Mall — also known as JD.com — have yet to issue official comments on the matter.
While that has yet to be officially confirmed, the latest report suggests Cheng is leaving LeEco of his own volition, likely because of severe financial troubles that the Chinese consumer electronics manufacturer is currently experiencing. Cheng was one of numerous top business executives LeEco recruited from global competitors and financial institutions two years ago when the firm was in the process of aggressively expanding its operations in a bid to diversify its business portfolio and revenue stream and continue fueling its startup-like growth. That strategy is currently being tested due to the fact that LeEco found itself in the middle of a massive tech crunch as the company overextended its resources and was unable to turn most of its units into profitable businesses before it ran out of liquid assets. Due to that state of affairs, LeEco was recently forced to make a number of difficult decisions, including scrapping its planned $2 billion acquisition of VIZIO. While the company officially said it canceled the deal due to “regulatory headwinds,” industry watchers believe that even if LeEco was granted all necessary approvals, the Chinese firm would have a hard time actually going through with the all-cash deal.
LeEco is currently relying on capital injections to keep most of its businesses afloat and is also reportedly looking to cut costs, as industry insiders claim the company will be laying off approximately a third of its entire workforce in the United States in an effort to put its financial issues under control. Time will tell whether LeEco manages to bounce back from this ordeal, but an update on the situation is expected to follow shortly.