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LeEco CEO YT Jia: No more cash burning, I’ll take a 1 RMB yearly income

LeEco CEO Jia Yueting gets emotional as launching LeSEE. Photo provided by LeEco.

LeEco founder and CEO Jia Yueting (YT Jia) sent a letter to all the employees on Sunday, marking LeEco’s 13th birthday. In the letter, Jia stated that the company has over-expanded, and that LeEco must now adjust its steps to tackle the issues that this has caused. He said that “a cycle, a legend, a disruption and rebirth” is waiting upon every LeEco employee.

An overly aggressive over-expansion?

In the letter, Jia wrote about problems he saw arising from the supply of Le Pro3, the first smartphone that LeEco launched in the United States. According to him, though the sales performance has been satisfying, LeEco’s technical support capabilities failed to match the pace of sales. Additionally, insufficient funding worsened the situation for the supply chain.

Jia admitted that, while LeEco has been growing and expanding fiercely, its funding and resources are comparatively limited. On the one hand, some projects had cost an arm and a leg; for example, the Le Supercar burned more than RMB 10 billion (USD 1.5 billion) even at the early stages. At the same time, LeEco’s financing capacity lags behind the company’s monstrous needs for funding.

Another problem concerns LeEco’s corporate organization. With over 5,000 new employees hired in 2016 alone, Jia noticed that orientation training for the new staff is inadequate, and some of the employees are not performing their duty.

Making a promise that he himself will from now on have an annual salary of a mere RMB 1, Jia said that the company’s human resources department will later introduce detailed plans to upgrade organizational efficiency – senior executives who fail to meet the requirements will be dismissed.

An Ecosystem? Here are the focuses for now

“At the first stage of LeEco ( formerly known as LeTV) development, we rapidly expand subsidiaries. We were like racing while blindfolded, burning cash and pursuing larger and larger scales. We overly stretched the frontlines of our global expansion,” Jia wrote.

The businesses that LeEco have covered include video-streaming, cloud computing, automobiles, sports, and devices like smart TVs and smartphones. It’s noteworthy that Le Supercar has completed its first round of financing at USD 1.08 billion. According to Jia, the first car in mass production will meet the public in early 2017 – a fruit of the joint efforts from LeEco and its strategic partner, Faraday Future.

Although LeEco will soon introduce LeAI, its strategic plan in artificial intelligence, Jia said that this will not become another subsidiary of LeEco, but something that will integrate with the existing products.

Global expansion will also come to a pause, with LeEco’s market already covering markets in India, Russia, the United States – and, needless to say, China.

To tackle the issues which are becoming more obvious, Jia decided that LeEco will focus on its current businesses and markets for the period to come. Jia cited the need to improve customer experiences with enhanced and improved services, provided by more efficient teams.

(Top photo from Baidu Images)

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