Chinese internet conglomerate LeEco spent much of the past few years focusing on aggressive growth, but the company is now coping with the aftermath of several failed moves. In a meeting with shareholders Wednesday, chairman Jia Yueting said the company is facing severe financial problems, Reuters reported.
Jia told investors the company’s current cash crunch is “far worse than expected” and LeEco plans to reconfigure its finances and holdings to stabilize its footing. The LeEco chairman also said a $2.21 billion investment from Chinese property company Sunac in January wasn’t enough to cover all of LeEco’s current needs, saying it “obviously did not meet our expectations.”
“Since October, we took some measures and made some mistakes, but LeEco’s nonlisted units’ finances got tighter,” Jia said. “This is what we discovered over two-to-three months.”
At the moment, LeEco has focused on covering its outstanding debts and will plan to consolidate and drop some of its units and assets. Jia said the company has currently repaid around 15 billion yuan ($2.2 billion) in debts. LeEco is also expected to refocus on its existing smart TV unit to bolster its finances.
Earlier this year, LeEco also announced severe layoffs and cutbacks in many of its sectors. Within the U.S., LeEco laid off 70 percent of its staff, who primarily focused on consumer electronics sales for the company. Elsewhere, the company also had similarly severe cutbacks in divisions including its marketing and sports streaming units. The cutbacks are reportedly part of an effort from LeEco to refocus on the Chinese market and its core market of video and consumer electronics.
Jia’s public statements come as LeEco tries to regain its focus after various major stumbles. The company originally gained its scale as a Netflix-like streaming video option for Chinese consumers, but within the past few years, it has expanded to a bevy of other market sectors ranging from autonomous self-driving cars to bicycles.
In the automotive space, the company was also a partner with American self-driving firm Faraday Future. Jia joined the company onstage for its CES 2017 presentation. LeEco also has made significant investments into its own self-driving research and production. The company raised $1.08 billion last year to build its own electric car, TechCrunch reported, and Jia wants to secure funding and start production as soon as possible.
During the company’s major expansion efforts last year, Jia publicly took an aggressive stance toward a variety of competitors. In the press, Jia said LeEco’s automotive research would eventually surpass Elon Musk’s Tesla and also bashed Apple’s recent product releases.