LeEco is currently experiencing financial difficulties.
The reduction is aimed at increasing focus on core markets and the digital content business after founder Jia Yueting last year said the company's expansion into China is too fast and expensive.
LeEco's business line extends from digital content to TV sets, smartphones, sports devices, and even electric vehicles. All that took place in less than a decade.
The Beijing-based company employed some 14,000 people worldwide late last year.
"Our broad business model requires a lot of capital," LeEco said in a statement. "It's been difficult in recent months to support all of our business models".
"As a result, our capital must be highly focused, resulting in significant restructuring and downsizing of our business, operations and manpower," the company said.