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LeEco plans to cut 10 percent of workforce

By FAN FEIFEI | China Daily | Updated: 2016-11-30 07:01

LeEco plans to cut 10 percent of workforce

LeEco's new 85 inch television is unveiled at the press event in San Francisco, Oct 19, 2016. [Photo/IC]

Chinese internet company LeEco is cutting jobs to pull in its horns and relieve its cash flow crunch.

Cash-strapped LeEco, which has a total payroll of 8,000, is planning to cut its workforce by 10 percent, according to the Guangzhou-based Time Weekly.

LeEco didn't deny the report and said that it needed to optimize its operations and reorganize the company.

An employee at the company's sports subsidiary Le Sports, who declined to give his name, told China Daily there are more than 1,000 employees in Le Sports, and 10 percent of the jobs will be cut.

Shen Meng, director of Chanson & Co, a boutique investment bank in China, said: "This layoff and shrinkage in operations by LeEco are a remedial measure to its previous overexpansion and cash burning."

Shen added what LeEco needs to consider is to cut off its non-core businesses and focus on key areas.

"Electric vehicles, real estate and e-commerce are far from LeEco's major businesses, which include consumer electronics and entertainment technology," said Shen.

LeEco founder and CEO Jia Yueting said it was starting to see signs of "big company disease", such as low individual performance and organizational redundancies.

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