Yahoo operations bid Goodbye to China


Yahoo! Inc is reported to shut down its last operation in China, the move which is likely to cut off 300 jobs in the country.

Yahoo shutsdown in china

Employees of Yahoo, based in Beijing office were informed of the closure on Wednesday, a spokesperson reported. The Beijing office offered no local products in china and the office in mainland China was for the research and development purpose only. Yahoo has around 12,500 workers worldwide at 2014 but has not mentioned how many would be affected in China. The company has employed 200 to 300 people the sources say and the shutdown would affect 2% of the total workforce around the world.

“We are constantly making changes to realign resources and to foster better collaboration and innovation across our business,” Yahoo said in a statement. “We will be consolidating certain functions into fewer offices, including to our headquarters in Sunnyvale, Calif.”

The increased pressures from the investors to reduce expenses seems to the reason for the closure. Reports suggest that the Yahoo CEO Marissa Mayer is under pressure to cut expenses of at least $500 million. Previous efforts of cost cutting reduced operations and cut jobs in Bangalore, India and Canada, in the past six months.

Yahoo’s experience in China had not been a smooth one. The company has to settle a lawsuit filed by two journalists who accused the web portal of sending the Chinese government with information that led to imprisonment of 10 years. The company was heavily criticized by the lawmakers and human rights activists, which the company denied responsible saying it was only abiding by with Chinese law. ¬†Yahoo with its good relationship with Alibaba, Chinese e-commerce giant, made billions of dollars, then eventually the relationship soured too. Yahoo continues to hold 15.4% stake in Alibaba and has announced plans to spin-off the holding into a separate holding company.

Recently, Chinese government imposed new rules for the foreign-based tech companies to submit source code, audits and build intentional backdoor into hardware and software products. These rules were announced exactly a month before the closure and is due to go into effect this month. The new laws were condemned by the Obama administration as a ‘major barrier’ to foreign trade and open market.