LeEco on Wednesday said it has revised its business strategy for the coming year, based on the “overall volatility and uncertainty that is forecast for the global economy.” Recently, the company admitted expanding too fast too soon, and has since been scrutinising plans. This overhaul will imply several changes across the markets in which it operates, including India, where the company has confirmed layoffs are planned.
To recall, LeEco entered the Indian market in January this year, and the company has enjoyed some time in the limelight since. The company entered the offline market in the country in June by bringing the Le 1s to brick-and-mortar stores, and then expanded its retail partnerships the next month.
Now, LeEco in a statement to Gadgets 360 reacting to recent reports about its planned slowdown in the country, said that it was downsizing its operations in India. This “right sizing exercise” applies to “all its offices in various geographies” the company specified, with India just one of these markets. It added that India is one of the top three markets for the company globally, but mentioned that it is also a “fledgling operation”.
The company said that the decision to downsize operations in India was not “led by performance or competence parameters but entirely guided by business imperatives.” The statement further explained the reasons behind the move, “As we transit to a more strategic phase of our operations in India, it is the appropriate time to assess and take steps to ensure the sustainability and profitability of our business.”
Speaking about the layoffs in India, LeEco said it is doing what it can to alleviate struggles of “affected employees.” It said it is “open to offering outplacement services to affected employees who specifically seek assistance”
Referring to reports that it was exiting the offline sales market it had entered under six months ago, LeEco didn’t confirm its actual exit – however, it did say it was now focused on its online channels. LeEco said that it was at its core an Internet company, and that it “intends to concentrate on and bolster its online business.” The company said its “proven O2O model” will be vital to its business in India, but how this applies to actual offline sales isn’t clear yet.
The statement also shed some light on the company’s roadmap for India, pointing specifically to improving online channels with a “more consumer-centric” LeMall marketplace. LeEco also said it has a “robust product pipeline in the offing.”
In August, LeEco set up a manufacturing unit in Greater Noida, with an initial production capacity of 60,000 smartphones a month anticipated to ramp up to 200,000 units a month by the end of the year. At the same time, it announced it had managed to sell 1 million smartphones in the country since launch.
While LeEco is silent on if there’s a rethink on its Make in India plans, the company says it “will adopt a laser-sharp focus on overall organisational efficiency, capacity-building and talent nurturing while remaining unwaveringly committed to maintaining a sustainable and profitable business model.”