LeSports, an eco-sports start-up in China, on Tuesday announced a plan to "optimize" and reorganize its staff, as its parent company LeEco grapples with reports of liquidity problems.
When asked about how many LeSports employees would be dismissed, the company's public relations representative told the Global Times that about 10 percent of its staff "will be optimized in line with their performance."
This is in line with the personnel management policy adopted by LeEco, which previously told the Global Times that every year, it eliminates the worst-performing 8 percent to 10 percent of staff.
An unidentified source close to the matter was quoted by domestic news portals including lanxiongsports.com on Tuesday as saying that the layoff would affect 200 LeSports employees.
The sports arm, which was founded in 2014, has spent heavily to acquire digital broadcast rights for world-famous sports events. The division will continue this practice, according to a press release sent to the Global Times Tuesday.
In addition, LeSports appears to have high hopes for the sports equipment industry.
Its original sports equipment business group will be spun off as an independent company. Zhang Zhiyong, president of LeSports, is designated as the CEO of the new company, said the press release.
Liu Dingding, a Beijing-based independent industry expert, applauded the changes.
"It's better than nothing. Those moves can help restore investors' faith to some extent," Liu told the Global Times Tuesday. "LeEco has reached a point where its very existence is at stake."
Still, following the announcement on Tuesday, the shares of LeEco's listed arm on the Shenzhen bourse fell nearly 8 percent, closing at 35.8 yuan ($5.2).
