Yahoo China is closing and 300+ staff laid off

Published: Thu, 19 Mar 2015 by Rad

Yahoo is moving out of China with the closure of its research center in Beijing - its single location in the country - reported by South China Morning Post. US Internet giant Yahoo will close its research and development center in Beijing as the firm seeks to consolidate some jobs into fewer offices.

The Sunnyvale, California-based company told its 350 employees, mostly engineers and scientists, on Wednesday that the centre will shut down. Layoffs would begin at the end of this month, a person familiar with the matter said.

"We are constantly making changes to align resources, and to foster better collaboration and innovation across our business. Today we informed our employees based in Beijing that we will be closing our office there,"

Yahoo statement

Research and development center

Yahoo employees based in the Beijing office were informed of the closure on Wednesday, a spokeswoman said. Yahoo offered no local products in China, and the office - Yahoo's only physical presence in mainland China - served as a research and development center.

Yahoo did not say how many employees were affected by the office's closure, but a source described as familiar with the matter told Bloomberg that the office employed 200 to 300 people. Yahoo counted 12,500 employees worldwide at the end of 2014, meaning the closure affects about 2 percent of its global workforce.

Reduce expenses

The closure comes amid increasing pressure to reduce expenses from investors, including activist investor Starboard, which has strongly suggested that Yahoo CEO Marissa Mayer cut at least $500 million in expenses. The company has cut about 600 jobs in the past six months, mostly at operations in Canada and India.

Two years ago, an activist investor named Dan Loeb bought a bunch of Yahoo stock and demanded that its board and CEO resign. In their place, he put Marissa Mayer at the top of Yahoo.

"Yahoo's main assets include its core Search and Display advertising businesses (Yahoo's core business), its non-core 15% stake in Alibaba, the world's largest e-commerce company, and its non-core 35.5% stake in Yahoo Japan, Japan's leading Internet advertising company"

Jeffrey Smith of Starboard

Now a new activist investor is going after Yahoo. This time it's Jeffrey Smith of Starboard. He hasn't asked Mayer to resign.

But he wants her to:

  • Sell Yahoo's stakes in Alibaba and Yahoo Japan
  • Cut costs by $250 million to $500 million per year
  • Quit buying startups that don't add to revenues
  • Combine with AOL

Not the first time Yahoo fires employees

2014 - California and India

Yahoo closed its Carlsbad, California, office and laid off 59 employees, according to a filing with the state employment office. The company told workers the San Diego-area facilities would be closing; their last day will be Nov. 14, according to the document.

Again the development comes as the company looked to consolidate its operations in Los Angeles.

2014 - Surprising move in India

Yahoo SDC (Software Development Center) laid off everybody in India . The last day was November 7th and out of 2250+ people in Yahoo SDC Bangalore, only 250 remained (some of them have been given an option to go to Sunnyvale office).

The ones who have survived the layoff were mostly from engineering operations team (Yahoo India teams, which looks at web properties were untouched).

This came as a surprise, given that Yahoo acquired Indian startup, Bookpad and in some ways, sent a strong signal of focusing on Indian market for talent.

2013 - working from home banned

In February 2013 Yahoo CEO Marissa Mayer banned her 12,000 employees from working from home.

Despite predictions of "epic policy failure," in the words of Julie Ford-Tempesta, Yahoo's senior director of real estate and workplace, "employee engagement is up, product launches have increased significantly, and agile teams are thriving," adding, "The workplace has become a catalyst for energy and buzz."


Yahoo has made its massive round of layoffs official in 2012. The company released a statement saying that 2,000 jobs have been cut, or 14 percent of it total workforce (which was previously around 14,000).

At the time Yahoo said that it would save $375 million upon completion of the layoffs. The company was expecting $125 to $145 million in a pretax cash charge relating to employee severance packages

Our previous news stories