Caixin
Jun 04, 2017 11:02 AM
BUSINESS & TECH

Unpaid LeEco Smartphone Partners Protest Outside Company Headquarters

(Beijing) – More than 20 suppliers and business partners of struggling online video giant LeEco’s smartphone unit camped outside the company’s headquarters on Friday, demanding payment on outstanding bills two weeks after reports the company was planning to slash the unit.

The suppliers gathered at LeEco’s Beijing headquarters chanting “LeEco, pay your bills,” a Caixin reporter observed at the scene. As of 5 p.m., no one had emerged from the LeEco office to address the group.

“We’ve been coming to LeEco’s smartphone unit since November seeking payment of their debts. In total we’ve come seven times,” a supplier from Henan named Lu Wen told Caixin. “We’ve been through a winter, a spring and summer. The only season we haven’t experienced yet is a fall. But each time they put us off and don’t repay anything.”

One event promoter among the group said he hadn’t been paid since late last year, and is owed 3 million yuan ($441,000) by the company.

LeEco’s cash crunch first burst into the headlines late last year, created by a rapid expansion that saw the company move from its original online video service into a wide range of new areas including smartphones, new energy cars and TVs.

One of the company’s biggest smartphone suppliers was Taiwan’s Compal Electronics, which in March completed a swap that saw it receive 2.9% of LeEco’s television unit in exchange for cancelling outstanding debts of about 700 million yuan. In May, sources inside the company said LeEco was planning to lay off nearly half the workers at its smartphone unit, a move that would leave fewer than 1,000 employees.

LeEco was also reportedly planning large layoffs at its sports unit, and was planning to slash headcount at its U.S. based operations to just 50, from a previous total of more than 300, according to reports around the same time.

Contact reporter Yang Ge (geyang@caixin.com)

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