LeEco, a Chinese technology company, acknowledged Tuesday that it faces "challenges with raising new capital" and is planning to lay off 325 employees in the United States, amounting to almost three-quarters of its US workforce.

In a statement from its North American headquarters in San Jose, northern California, which opened April last year, LeEco noted that "the breadth of our business model is capital intensive" and it has been "difficult in the past few months to support all of our business priorities."

Screenshot of LeEco's statement

Starting as a video programming provider in China in 2004, the company has expanded into consumer electronics businesses, with product lines including smart TV sets and smartphones, inside and outside China, and has been working with other companies to develop an electric vehicle with self-driving capabilities.

In its statement, LeEco said, "we've made progress in growing our distribution channels."

However, it noted that "the capital we do have will have to be highly focused resulting in a significant restructuring and streamlining of our business, operations and workforce. This will impact approximately 325 people in the United States."

Jia Yueting, co-founder and head of LeEco. /Reuters Photo

News of the redundancies was a big blow to many of its US staff. One of LeEco's former employees told CGTN, some of the US employees who lost their jobs in LeEco said they felt a "little tricked" and "upset", because they felt there was a lack of transparency at the top of the organization. Although he also added that this might have been due to cultural differences between the Chinese management and their US staff.

LeEco talked about hiring about 700 employees at its Silicon Valley facility last year but since has not confirmed or updated the size of its US workforce.

"We will continue to operate in the US with our existing product portfolio that puts content at the heart of the experience, and we believe that our products can compete," the company said.

(Source: Agencies)