Massive layoffs are expected at US-based Chinese company LeEco

Massive layoffs are expected at US-based Chinese company LeEco
LeEco Global Holdings Ltd Founder, Chairman, CEO Yueting Jia.
PHOTO: CNBC

LeEco, a Chinese company that made a big splash in the US last fall, is preparing for a round of layoffs that may happen as soon as Tuesday, according to sources.

Two people told CNBC the company is planning massive layoffs in the US, with one source saying that only 60 employees will be left after the cut.

The company's current headcount in the US is over 500, according to this person.

CNBC obtained an email calling employees together for a Town Hall Meeting that will occur in three of the company's US locations, including San Diego, Santa Monica and San Jose, at 10 a.m. PST.

The email asks employees to attend unless they're off for the day, in which case they're asked to call in.

It's not clear what will be announced at the meeting, but a second source told CNBC that layoffs will be announced tomorrow.

Under the restructuring, LeEco will refocus on encouraging Chinese-American consumers to watch LeEco's Chinese content library, one person said.

It may also continue to invest in Faraday Future, a company backed by LeEco that's attempting to build an electric car, sources said.

Chinese news services have previously reported that LeEco was planning to lay off about one-third of its US staff.

LeEco started out in China as a streaming media provider - it has been referred to as the "Netflix of China" - and looked to expand into the US by selling affordable hardware that linked consumers to media content from LeEco's partners.

Its first batch of products included two smartphones and several TVs, all of which offered flagship-level specs at affordable prices.

The idea, it seemed, was that LeEco would make its money back when consumers tuned in to partner programming.

When it made its debut in the US in October 2016, it also promised more, including VR headsets and an electric bicycle.

The layoffs would be the latest move to stain the company's US brand.

LeEco's CEO, YT Jia, stepped down from his position leading its publicly traded arm on Sunday.

Jia will remain on the board.

A spokesperson for the company declined to comment.

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