LeEco, often called the "Netflix of China," is in the news again, and again it is because another disaster has befallen the company. After announcing a $2 billion merger with TV-maker Vizio and then canceling it, as well as purchasing a Silicon Valley property from Yahoo and then selling it, LeEco's rapid expansion to the US is now rapidly unwinding. Massive layoffs are coming, and the CEO is ceding some control over the company.

CNBC reports that more than 85 percent of LeEco's US staff is being laid off. It cites one source as saying "only 60 employees will be left" after cuts to the 500-strong US workforce are made. CNBC obtained an e-mail calling for an ominous all-hands meeting for this afternoon, where the move will no doubt be explained to employees. The report says the remaining 60 people will be tasked with "encouraging Chinese-American consumers to watch LeEco's Chinese content library." It seems as though LeEco's US consumer electronics plans are dead.

But that's not all! Reuters reports that Ji Yueting, the founder, CEO, and chairman of LeEco is ceding some control over the company. He has stepped down as the CEO of the LeShi division, which is the only part of LeEco that is listed on the Chinese stock market. He will be replaced by Liang Jun, a former Lenovo executive, while Ji Yueting will still be "CEO of LeEco." The CFO also quit, citing "personal reasons."

LeEco is often called "The Netflix of China" due to its popular "LeTV" video service. The massive cash flow from LeTV funds the rest of the company, and it has used the cash to aggressively expand into smartphones, TVs, VR headsets, movie production, smart bikes (really!), self-driving car research, and other areas. LeEco is also the parent company of electric car "maker" (it has not actually made a consumer car yet) Faraday Future, which has shown a similar disconnect from reality with a mile-long list of over-promising and funding problems.

A few days after a splashy US launch in October, Yueting sent out a memo saying the company had "overextended in our global strategy" and that the company's "capital and resources were in fact limited." Now it seems reality is catching up with LeEco's ambitions, and it's not pretty.