Chinese tech company LeEco is cutting back its presence in the U.S., but its Faraday Future subsidiary says it’s not feeling the impact.
LeEco is laying off most of its U.S. workforce – 325 employees, about 70 percent, with a lack of corporate funding cited as the reason. The company, with its video streaming and smartphone units, will keep some employees on staff to reach a “focus on the narrower segment of Chinese-speaking households,” according to CNET.
CEO Jia Yueting had made a splash in the U.S. hosting the company’s San Francisco media event in October. Soon after, bad news about the company’s financial condition emerged along with speculation over the future of its LeSee electric car and Faraday Future.
Less than a month after that October event, Jia informed employees in a company letter that big cuts were in store.
“We are starting to see signs of big company disease, such as low individual performance and organizational redundancies,” he wrote.
As for California-based Faraday Future, it will stay in operation for now. The FF 91 all-electric hypercar (as seen in the photo above) isn’t going away, the company said.
“This decision does not impact FF’s daily operations, the development of FF 91, nor our manufacturing plans in North Las Vegas in any way,” a representative for Faraday Future said to The Verge.
“Similarly, no layoffs are planned for FF employees.” He also said that the company is “working on securing rounds of funding with new investors.”
At the time Faraday introduced the FF 91 at the Consumer Electronics Show in January, the company was under a great deal of pressure. Company executives were leaving and speculation soared about the future of the startup.
There was also talk of Jia cutting back on funding Faraday. The Verge reports that once-monthly stipends from the CEO had stopped a few months ago.
That relationship was said to be tense with Jia. One ex-Faraday employee said that the startup’s relationship with LeEco was like “indentured servitude.”
SEE ALSO: Faraday Future Breaks Plans For California Plant And Will Downsize Nevada Plant
Faraday’s global chief financial officer affirmed the company’s continuation, and that seeking outside investors will be part of it, in a statement:
“Hearing about layoffs at our strategic partner LeEco is discouraging. However, I want to be clear that these layoffs have no impact on Faraday Future. We remain committed to our immediate goals of diversifying FF’s investment sources and getting FF 91 on the road in 2018, and we remain confident in the outlook for diversifying FF’s global investment.”
No comments were made about the future of its North Las Vegas plant.
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