By on May 23, 2017

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China’s Netflix equivalent, LeEco, confirmed it would be eliminating the better part of its North American workforce today. LeEco has recently gotten involved in a myriad of expensive tech-focused endeavors that have wound up screwing its finances six ways from Sunday. One of those projects was serving as the primary financial backer of America’s Faraday Future, the electric car company we’ve been scrunching our faces at for over a year now.

Faraday seems to have encountered or created every problem an automotive startup could imagine and, with its primary source of income shrinking its U.S. employee base by 70 percent, things have never looked worse. 

According to CNBC, LeEco may continue to invest in Faraday Future, but inside sources had little to add to the claim. The company’s town hall meetings, occurring in three U.S. office locations, revolved primarily around apologizing to the 325 employees it was cutting. But, based on how LeEco has handed its side businesses thus far, the term “may” feels like a non-committal way to say “no.”

Faraday Future might have already been aware of LeEco’s waning Western interests. Certainly, it was familiar with its financial troubles. At present, Faraday is focusing heavily on its fundraising efforts — hinting that it knew its cash flow was about to run out, or already had.

[Image: Faraday Future]

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6 Comments on “LeEco Lays Off Majority of U.S. Employees; Likely More Bad News for Faraday Future...”


  • avatar
    orenwolf

    I don’t suppose anyone is surprised by this.

    I’m personally very interested to see why this has happened, though – was the whole thing an attempt to get Chinese funds out of China? Or was there Chinese political issues that doomed this US expansion, or an issue with Chinese management, or something else entirely?

    It’s unfortunate that FF is going to get caught up in this mess. :(

  • avatar
    DavesNotHere

    Orenwolf, I have some insight into FF, and while there may be other factors, the main factor seems to be Executive mismanagement based on overly grandiose thinking. LE just entered the US last fall, and had a huge CES display, but that seems to be the extent of their plan, and they didn’t have a Plan B, they just expected to things to take off. My understanding is that their management style is to dream and talk big, and push hard to make it happen now, and withdraw or flail in another direction if things don’t work out right away.

    That’s basically what happened with the FF01. The FF91 seems to be a similar situation, where they developed a product based on a wildly maximal vision, with an equally inflated BOM and limited market fit. Lots of talented people there, unfortunately saddled with extremely questionable leadership.

  • avatar
    TheDoctorIsOut

    Seems with each press release it’s more like Faraway Future.

  • avatar
    brn

    TTAC, I think the term DeathWatch would finally be appropriate.

  • avatar
    phila_DLJ

    Maybe they can merge with Elio! And Coda!

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