LeEco CEO is believed to have sent a mail to its employees, stating the financial vulnerability of the firm. The letter said that company overstretched itself in terms of its capital and resources. Its CEO Jia Yueting has also announced that he is slashing his compensation to $0.15 (RMB1). The letter did not mention any other cost cutting measures.

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In its letter, LeEco CEO stated that the company's strategic development took place at a very fast pace, which put a strain on its cash resources. It also said that the company was over-extended in its global strategy.

LeEco recently made its debut in the United States, after successfully gaining a foothold in India. The company is also said to be contemplating using India as the base for manufacturing cheaper smartphone. However, now the company is facing problems with liquidity.

"We got over-extended in our global strategy. At the same time, our capital and resources were in fact limited," Jia said. He also said that some of the company's "non-listed" businesses lacked momentum. He stated that some of the group's businesses are facing issues with their "pace and organizational capacities."

LeEco was founded in 2004. It obtained its first funding worth $17.5 million in August 2008. Since then, the company has diversified in various areas including automotive, cloud computing, content services, and entertainment. It recently acquired television manufacturer Vizio in a $2 billion deal.

Jia said that the company's management should take responsibility for the cash crunch. However, the letter did not disclose whether the company has made any arrangements for further funding.