The embattled Chinese conglomerate LeEco has once again raised concerns over its declining business as the company begins to possibly wind up its business in the all-important Indian market. The once resurgent company announced that it is firing 85 percent of its Indian staff and is also allowing two of its top executives to resign.

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While LeEco's management is tight-lipped over whether it is shutting down its operations in India, industry experts feel that the latest news about job cuts most certainly indicates an exit strategy.

The world got a sniff about LeEco's troubled operation in November last year when it founder and billionaire Jia Yueting wrote an email to his employees that the company is heading towards a cash crunch situation. The founder made no bones about accepting the fact that his company made a mistake in aggressively expanding its business despite capital constrain.

Founded in 2004, the Beijing-based conglomerate over the years has fast expanded into different business including consumer electronics, automobiles, film, and even driverless car. The multinational company entered the lucrative Indian market in 2015 by launching a slew of electronic products. However, it entered the burgeoning Indian smartphone industry last year by launching three flagship smartphones.

But the Chinese company seems to have been faltered by its over-ambition as it failed to create a sustainable demand for its product in the Indian market. This despite the fact that its advertising budget over-exceeded that of Chinese rivals like OPPO and Vivo. By a rough estimate, the company was reportedly spending nearly 80 crore every month in running extensive advertisements campaigns.

The crack in LeEco's smartphone business first appeared in December after the company announced that it would stop selling its smartphones through offline stores. The news surely came as a dampener for the company's investors, who had already pressed the panic button after the news of cash crunch situation broke out.  

Talking to an Indian newspaper, LeEco's India chief operating officer Alex Li accepted that the company is going through a tough time, but claimed that there is no exit strategy in place and the company very well intends to carry on with its Indian operation.

"All businesses need to be profitable to be sustainable. That has been the primary objective in taking certain measures," Li said on layoffs, but added that the number of layoffs being reported in the Indian media is incorrect.   

Most industry analysts are taking Li's pep talks with a pinch of salt, claiming that the LeEco will most certainly exit the Indian business in a matter of few months.  

TagsLeeco, LeEco India, china, China and India