According to a new report from The Economic Times, LeEco has fired 85% of its employees in India and is said to be looking to exit the country. The news comes after four months when the Chinese smartphone maker confirmed it is facing a major financial crunch.

"LeEco India"

The company’s Mumbai and Delhi offices are said to be left with minimal staff, while it is now firing people at the research and development centers in Bengaluru.

According to three top industry sources, top two executives — Atul Jain, chief operating officer of smart electronics business, and Debashish Ghosh, chief operating officer for Internet applications, services and content – have resigned from the company. In December last year, LeEco exited the offline sales model owing to limited funds allotted for the Indian unit. The company had outpaced Xiaomi, Vivo and Oppo with an advertising budget as high as Rs. 80 crore per month.

LeEco India chief operating officer Alex Li confirmed the exit of the two senior executives, but denied any plans to exit the market or liquidate stock. Speaking on the layoffs, he said that the company has recalibrated and reimagined its business in India since last year and has taken steps to ensure that the scale of operations is in sync with resources. He also said the company has new models in the pipeline.

However, a senior executive with a leading ecommerce marketplace that does business with LeEco said that the company is preparing to exit India as it has been struggling to find a winning formula, with demonetisation further hurting sales. He also said “Xiaomi is strong online and Oppo-Vivo offline. So, LeEco found it neither here nor there.”

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LeEco had entered India early last year with the Le 1s and Le Max smartphones. The company had been aggressive in the country with campaigns and discounts. The company also inaugurated first manufacturing facility for ‘Make in India’ in August last year and soon started smartphone manufacturing in the country and invested $7 million for the same.