LeEco cutting its U.S. workforce, plans to sell Silicon Valley headquarters

Posted March 20, 2017

According to a report from Reuters, the company has sold the property to Genzon Group for a hefty $260 million.

LeEco may not be around in the USA for much longer - the company's big attempt to make a name for itself here seems to have failed. Last year, when the device maker entered the USA market it also acquired a 49-acre property in Silicon Valley from Yahoo which was supposed to be turned into a sort of campus for the company's employees. The plot was supposed to house an EcoCity with 12,000 employees. The Genzon Group has confirmed that the site's sale is now under negotiation. In November, chief executive Jia Yueting wrote in a letter to staff that the firm was rapidly running out of cash due to a "weak capital structure", and partially blamed the crisis on expensive ventures such as its electric vehicle unit. In October, the company held an extravagant USA launch in San Francisco where LeEco executives stated the U.S. was among one of its most important markets. The company has at least halved the workforce in Silicon Valley alone.

LeEco, meanwhile, did not admit that it is looking to sell the land, claiming that it is still only in the initial planning phase on what to do with the property and that the company is still looking for a development partner. Reuters reports that LeEco has been cutting its American workforce and is struggling to pay its debts.

LeEco, an ambitious Chinese technology conglomerate that signaled its entry into the United States in October of a year ago, is known as the Netflix of China. Jia, in October, said LeEco US employs "more than 500". The firm refused to comment on the employee number giving the reason that the headcount keeps changing due to additions and or departures.

LeEco got a $2.2 billion investment from the property company Sunac China Holdings in January, but that money was earmarked for LeEco's entertainment business and not its languishing auto upstarts, which have yet to complete any production-ready vehicles or a factory in which to build them.

The expensive dream of developing luxury electric vehicles by LeEco uses Faraday Future technology, which is a startup in United States funded and controlled by Jia.

LeEco's flagship unit, Leshi Internet Information and Technology Corp Beijing, saw a plunging in their shares as well of about 25% over the period of five months.