LeEco's crash in the US leaves hundreds unemployed

In addition to the layoffs, the company sold off property, and they dropped their plans to acquire Vizio for $2 billion.

Published Wed, May 24 2017 2:23 PM CDT   |   Updated Tue, Nov 3 2020 11:55 AM CST

Chinese smartphone manufacturer LeEco has announced that they will cut over 300 jobs at its US business, which is around 70% of its local force.

The cuts are being made to increase the company's investments in its home market. Last year, Jia Yueting said that the expansion to the US market had been too quick and costly.

LeEco's crash in the US leaves hundreds unemployed | TweakTown.com

The company made a bold entry into America, but they failed to market itself appropriately, which resulted in this situation. Additionally, they failed to secure additional funds to continue growing the US operations at their current capacity which led to the layoffs.

In addition to the layoffs, the company sold off property, and they dropped their plans to acquire Vizio for $2 billion.

The company will now try to recover from this setback and focus more on the Chinese market and the Chinese demographic within the US. The company states that they will transition towards a "phased" roll out into the US market.

We reached out to Anshel Sag, Associate Analyst at Moor Insights & Strategy regarding the situation at LeEco and he stated, "LeEco had very ambitious plans, but tried to do too many things too quickly as a new entrant in the US market and overextended themselves. Entering the US market is a difficult thing to do for many companies with one product let alone an entirely lineup as large as LeEco's with smartphones, TVs, bicycles and cars." He continued, "LeEco's biggest hardship was that their unique differentiation, their TV service, was supplanted by offerings like DirecTV Now, YouTube TV and Sling TV which have better program offerings and work on more than LeEco devices. LeEco's devices did not lack in quality or performance, even though their software did need some work. For being a new entrant into the US market they did a pretty good job initially, but ultimately overextended themselves not giving themselves room and time to fail."

Lana has a passion for technology and science. She spends her time looking for the latest and most interesting technology and science news. Her passion is in gadgets, wearables, and other cool and interesting applications of technology or science. She also spends her free time gaming in MMOs like World of Warcraft. She has prior experience covering technology for publications and breaking news. If she’s not doing either, you might just find her exploring the metaverse in VR. Lana wants to expand TweakTown’s coverage of mobile, wearables and gadgets while also bringing her experience with science and general tech to TweakTown. Her area of coverage is around science, technology, smartphones, wearables, and general neat gadgets. She hopes to one day be able to drive around in her self-driving car while she schedules an appointment for a SpaceX trip to the moon on her smartwatch.

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