March 30, 2017

LeEco to reportedly sell its Silicon Valley facility 'EcoCity' amid financial troubles

20 March 2017, 01:41 | Marlene Myers

Cash-starved LeEco seeks buyer for Silicon Valley land it bought from Yahoo less than a year ago

China's LeEco, Tesla wannabe, to sell Silicon Valley site amid cash crunch

LeEco is developing luxury electric vehicles with Faraday Future in the United States, a startup Jia funds and controls.

LeEco bought the property from Yahoo in June at about the same time it opened its first USA headquarters in San Jose, California. In October, the company held an extravagant USA launch in San Francisco where LeEco executives stated the U.S. was among one of its most important markets.

Billionaire founder and CEO Jia Yueting had sent a letter to staff in November admitting LeEco was facing a "big company disease" and was battling a cash crunch after plunging into corporate growth at a rapid pace. In a more worrying act, it plans to sell off its 49-acre Silicon Valley office to Genzon Group.

The site, which LeEco originally purchased to build an "EcoCity" capable of housing 12,000 employees, was meant to become the company's U.S. headquarters and an "open campus" that would replace its current 800,000 square-feet office in San Jose, according to the company.

Genzon confirmed it was in talks to buy the site, but declined to comment on the deal size or whether it was teaming up with any partners as the discussions were still ongoing. On the auto front, the company has taken an aggressive stance to compete with Tesla and major automaker luxury brands.

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Well as it appears, the company's downfall continues on. Last May, the company said it had 1,000 employees in the USA, some of which were engaged in research and development for its electric supercar. Headcount reduction have also been seen in LeEco's various business units in its home country of China, with its India workforce also said to have been reduced by nearly 80 percent.

"We've always envisioned EcoCity would be an open environment that would be a place for our employees, our partners and the community to collaborate", the company said in an emailed statement to Digital Trends.

Jia hoped to stabilize the company's financial condition, and in January pledged the company would see that happen in three-to-four months. However, that was before LeEco received a capital injection of $2.2 billion from property development group Sunac China Holdings.

However, that was only for its entertainment companies, and not for its automotive business. Jia is Faraday Future's only publicly known investor. Still the outlook of the company remains uncertain as Faraday quoted that they were going to scale back their production plan at the Nevada factory, which is yet to be built.

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