BENGALURU (Reuters) - Chinese electronics maker LeEco has no plans to exit operations in India, it said on Friday, refuting a media report that the company was preparing to leave the market although it has cut almost 80 percent of its workforce.
"India is one of the most strategic markets for LeEco," the company said in a statement, adding that it had no plans to leave and was gearing up to launch its next generation television in the country.
The Economic Times reported on Friday that the company was firing 85 percent of its Indian workforce and was looking to exit is operations in the country. bit.ly/2m2kNDA
LeEco, which entered the Indian market in 2016, did not mention job cuts in its statement. But a company representative said restructuring measures had resulted in a workforce reduction.
"The company at the moment has over 80 employees in India. At the end of last year, we had around 350 employees," the representative added.
In a letter to staff in November LeEco Chief Executive Jia Yueting said the company was experiencing a cash crunch as a result of expansion at an "unprecedented rate". Leshi Internet Information and Technology Corp Beijing is its listed smart TV subsidiary.
"Globally, the company has adopted several measures to counter cash shortage. The whole idea is 'profit or perish'. To that extent, steps to recalibrate towards that goal have been initiated," the representative added.
Market analyst Jaipal Singh at IDC India said competition in the Indian smartphone market was very stiff. "Timing of market entry is crucial and some manufacturers tend to fall behind," he said.
A former employee at LeEco's Mumbai office, who quit after six months at the company, told Reuters the CEO's letter in November had left him disillusioned and prompted him to resign.
Singh said challenges in the market had mounted as Indian consumers were value conscious but also look for more features in their products. "So innovation is a key criteria for these smartphone manufacturers while keeping the cost low," he said.
Reporting By Samantha Kareen Nair and Arnab Paul in Bengaluru; Editing by Muralikumar Anantharaman