LeEco Is Said to Miss U.S. Sales Forecasts

LeEco Is Said to Miss U.S. Sales Forecasts
Fotolia

Chinese technology conglomerate LeEco is sharply scaling back its U.S. ambitions, according to Bloomberg. The company missed its projections for 2016 sales in the U.S. by a wide margin and is planning to cut more than a third of its U.S. workforce, a person familiar with the matter said.

Billionaire  Jia Yueting is narrowing his vision for LeEco’s global expansion amid lackluster sales and the prospect of a cash crunch. The company entered the North American market in October with a splashy event in San Francisco, where it showed off an array of products, including ultra high-definition televisions, phones, virtual reality goggles and electric bikes. Yet LeEco generated U.S. revenue of less than $15 million last year after that October debut, compared with an original goal of $100 million, according to the person.

The company so far is only selling TVs, smartphones and some accessories in the U.S. The U.S. unit is also making plans to eliminate about 175 jobs, which would shrink its staff in the country to about 300 people, said the person, who asked not to be named because the financial details aren’t public. LeEco declined to comment on the planned job cuts and revenue miss.

At the time of its U.S. debut, analysts questioned whether LeEco could export its business model outside of China, where its brand is less well-known. The company’s aggressive approach to international expansion sharply contrasts with that of China’s three biggest internet companies: Baidu, Alibaba and Tencent. They have made slow forays in the U.S., opening modest offices in Silicon Valley and mostly focusing on investing in U.S. startups.