LeEco’s CEO confesses company facing ‘an apparent lack of momentum’
Chinese technology company LeEco’s CEO Jia Yuetingan sent an internal letter to his employees that, company is going through a severe cash crunch after the global expansion and he failed to oversee the events.
Jia said in the letter that ‘‘There is a problem with non-listed LeEco’s growth pace and organizational capacities, company’s globalization had gone too far despite limited capital and resources, resulting in “an apparent lack of momentum”.
Bloomberg reports that following the reveal of the letter, the shares of Leshi Internet Information and Technology Corporation and Coolpad Group Ltd. (chaired by Yueting) both fell dramatically. Coolpad reportedly took the worse hit, with shares falling by 25 percent
Before this statements from the CEO, Shares of LeEco’s listed arm closed down 2.26 percent to 39.71 yuan on Friday.
Management should be held responsible, Jia said in the internal letter. He volunteered to receive an annual salary of only 1 yuan (15 cents) from the company forever. Apart from this Jia asked employees to concentrate on ‘Existing business’ only.
LeEco was supposed to have a grip on various business ventures that include the unveiling of a self-driving electric car, new smartphones and TVs in San Francisco last month.
Jia Yueting made carpet bombing before with his infamous quote ‘Apple is outdated’ and cited some points to back his statement.
Yueting then said that ‘ We think the difference between us and Apple is very large. Apple is a mobile phone company focused on hardware and software…LeShi [another name for LeEco] is focused on the internet first, and only then on software, and finally on hardware.
Apple only has individual apps. This was the right choice during the first generation of mobile net, when CPUs [central processing units] and the mobile network speeds were not fast enough. However now we’re moving into the next era of mobile internet, these problems no longer exist. Moreover, having separate apps just means great obstacles in the user experience. We hope to break down these obstacles’.
According to the reports, the news about Jia Yueting is published by Global Times a strictly controlled publication closely aligned to the Chinese Communist Party. This may indicate some hard feelings harbored by the CCP against LeEco, as a negative news story such as this might normally not make it to press with a company in good stead with the government. Whether that’s the case in actuality, however, is impossible to know.