LeEco on Wednesday said it has “implemented a right sizing exercise” across all its geographies, including India. The clarification, which came following news reports that the company has fired a lot of employees in India and cut down on ad spending, reiterated that “the decision process was not led by performance or competence parameters but entirely guided by business imperatives”.
The release said India is one of top three markets for LeEco globally and as we moved towards 2017 it was the “appropriate time to assess and take steps to ensure the sustainability and profitability of our business”.
The company accepted that its business strategy has been “re-calibrated” keeping in mind the uncertainty forecast for the global economy in the coming year. “India being a fledgling operation, LeEco’s priority is to be an agile and nimble organisation that can withstand economic headwinds and sustain a profitable operation, at all costs,” the statement said.
While the release did not shed light on whether the company will continue its offline sales strategy, the statement said: “A newly-launched India-specific website; a robust product pipeline in the offing; a more consumer-centric LeMall are all powerful signals that LeEco is determinedly ushering in change which is the new norm, especially in the fastest-changing internet technology landscape.” It also highlighted that it was still an internet company and “intends to concentrate on and bolster its online business”.
It said LeEco has shown the “utmost consideration” for the affected employees and had taken an extremely sensitive and humane approach. “The company is open to offering outplacement services to affected employees who specifically seek assistance to orient them toward the future and help them feel supported as they started their new life as a job seeker,” the release added.
“These decisions have not been taken whimsically, but is a necessary part of LeEco’s efforts to transform the company and steer it to the path of profitability.”
Last month, in a letter to employees, LeEco Co-founder and CEO Yueting Jia, allegedly said that the company had been facing capital issues. Jia also wrote that LeEco plans to slow the company’s pace for expansion.
LeEco entered the Indian market with a range of smartphones early this year, and subsequently expanded its business by launching a slew of high-end television sets.