LeEco Lays Off Majority of U.S. Employees; Likely More Bad News for Faraday Future

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

More by Matt Posky

Join the conversation
5 of 6 comments
  • DavesNotHere DavesNotHere on May 23, 2017

    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.

  • TheDoctorIsOut TheDoctorIsOut on May 23, 2017

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

  • Brn Brn on May 23, 2017

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

    • SCE to AUX SCE to AUX on May 24, 2017

      Maybe, but you have to be alive to die later. Faraday Future has never sold a car.

  • Phila_DLJ Phila_DLJ on May 24, 2017

    Maybe they can merge with Elio! And Coda!