LeEco’s headquarters in San Jose, California have been bought by Chinese Han’s Group, Silicon Valley Business Journal reports, citing recent filings with First American, a title company that issued title insurance for the property located at 3553 N 1st Street. The wording of the report doesn’t suggest LeEco will be moving its United States headquarters at any point in the immediate future, but will apparently be paying its lease to the Shenzhen-based development company from now on.
Industry watchers believe that the change in property ownership of LeEco’s U.S. HQ is likely connected to the firm’s recent financial troubles. Following years of aggressive expansion, LeEco recently found itself strapped for cash before most of its various business units managed to become profitable. Due to that troublesome state of affairs, LeEco started halting many of its planned investments and is currently in the process of cutting costs, laying off employees, and looking for capital injections in order to survive these tremulous times. The company’s financial issues also reflected on its top management, as many of LeEco’s senior executives decided to leave the firm in recent months. The last major departure LeEco was hit with allegedly occurred on Friday after industry sources revealed the company lost its Global Head of Corporate Finance and Development, Mr. Winston Cheng.
LeEco’s San Jose HQ was officially opened less than a year ago and was originally planned to employ around 800 people by the end of 2016. Due to the company’s financial issues, that goal wasn’t met and its U.S. headcount ended up being 475 people strong come January 1, 2017. However, recent reports indicate that LeEco is now looking to lay off close to 175 of its American employees in an effort to reduce operating costs without shutting down the division entirely. Likewise, while the Beijing-based tech giant allegedly faced regulatory opposition regarding its planned acquisition of VIZIO, its recent decision to cancel the $2 billion deal was also probably related to its financial difficulties. It remains to be seen whether LeEco’s San Jose office stays open for the remainder of the year, but an update on the company’s operations will likely follow in the coming weeks.