The once upcoming Chinese internet giant has been entangled into a cash crunch last year due to overstretched expansion strategies that span nearly every hot verticals from video, smartphone, smart TV, and cloud computing to electronic cars. Although the cash-strapped company managed to raise funding from more investors and share transfer, their efforts weren’t quite successful in easing investors concerns.
The situation worsened as its relationship with Yidao Yongche, the ride-hailing service that LeEco holds a controlling stake in, turns sour while the later blames LeEco for diverting an RMB 1.3 billion fund originally earmarked for the firm to other purposes.
This only one of a series of struggles that the company is facing now. Local media reported that the company is preparing for over 1,000 jobs cut across its businesses.
After this shift, Jia will still oversee cooperate governance, strategic planning and core product innovation as chairman for the listed company. Apart from that, Jia says he will put more energy in the development of LeEco’s car business to accelerate innovation and bring its e-cars to the market.
He said to local media that the company’s electric car unit is going to launch Series A financing in the near future and the round is expected to be finalized in 2017.
CEO/Founder identity vs. team identity
“US startups have a strong sense of team identity and culture that is created not only by CEO but everybody in the team, whereas in Chinese companies it’s more about the personal identity and culture of the CEO,” said veteran entrepreneur tutor William Bao Bean in a previous interview with TechNode.
There are two types of CEOs in Chinese startups, according to Bao Bean, godmother CEOs who take care of you, and you look up them, and godfather CEO, a criminal boss who leads through fear. According to the description of a former LeEco employee, Jia seems a combination of both. LeEco might be a typical Chinese company that is operated under this culture, it certainly not the only one. As China’ startup industry matures, we hope there will be a new leadership style in the country.
—This article originally appeared on TechNode.