What’s new: Debt-ridden Chinese streaming service provider Leshi Internet Information and Technology Corp., also known as LeTV, announced that it will raise employee salaries and restore compensation for expenses to pre-pandemic levels as the company comes to the end of a financially sound year, according to an internal letter seen by Caixin.
“Our latest financial data shows that we have managed to balance operating profits and cash flow for the first time during the past few years,” said LeTV in the letter. The employee salaries and benefits will be restored after the next Lunar New Year, which falls on Feb. 1.
When Covid-19 broke out in early 2020, the embattled firm trimmed employee wages by nearly 10% and ceased paying out expenses.
Background: LeTV has had to lay off employees multiple times in the past, as its parent LeEco has been in a constant state of turmoil since 2016, when founder Jia Yueting first admitted his company had expanded too fast and was facing a cash crunch.
In May 2020, LeTV was forced to withdraw from the Shenzhen Stock Exchange due to three years of consecutive losses. Two months after that, it had to sell key trademarks including “Super TV,” the name of the company’s flagship smart television.
Earlier this year, when tech giants rushed to outspend each other distributing cash gifts to users during the Lunar New Year holiday, LeTV altered its app icon to include the fact that it had debts of “12.2 billion yuan,” or about $1.9 billion.
Contact reporter Manyun Zou (manyunzou@caixin.com) and editor Heather Mowbray (heathermowbray@caixin.com)
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