LeEco delays payroll for US employees following cash crunch

Last month we heard Chinese technology conglomerate LeEco is  facing issues in India where it laid off 85 percent of its staff, including senior officers, and is also planning on shutting down its north India office in NCR. This was notably due to overspending, especially in the advertising department.

According to Bloomberg, LeEco is facing now financial issues in the US as it reportedly delayed payroll for its employees this month.

The report suggests that LeEco’s employees in the US get their salaries on the 15th and last day of every month. However, the company told its employees that the paychecks that were suppose to arrive on 31 March are going to be delayed until 4 April . According to the company, the delay was due to issues with transferring money from China, suggests one of the people familiar with the matter.

After expanding operations outside of China, LeEco founder and CEO Jia Yueting admitted last year that the company was running out of cash and was finding it difficult to raise more. Even electric car startup Faraday Future was disappointed when it didn’t get enough backup from LeEco leading to concerns about the fate of the company’s billion dollar plant. Certain suppliers also suggest that LeEco was behind on payments and the company was stripped of some sports broadcasting rights after defaulting.

The company did however manage to raise CNY 16.8 billion ($2.2 billion), most of which came from Chinese tycoon Sun Hongbin’s Sunac China Holdings Ltd.

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from http://tech.firstpost.com/news-analysis/leeco-delays-payroll-for-us-employees-following-cash-crunch-370382.html