14 DAY TRIAL // Yahoo has started to lay off people in its international business, with some 2,000 employees being affected by the job cuts.
Next Big What reports that the Yahoo Software Development Center (SDC) has started to lay off people in India. The last day is November 7 and out of the over 2250 people in the office, only 250 remain, while others have been given the chance to move from Bangalore to Sunnyvale.
The site states that most of those who have “survived” the layoff are from the engineering operations team.
It doesn’t even seem to be an issue of cutting costs, but rather about consolidating the company’s development centers. Even so, laying off some 2,000 people doesn’t seem to be the best idea.
Employees are getting a severance package of 5 months and, in some extreme cases, 10 months, but they’ll have to leave the company by November 7.
This seems to be quite a surprise, considering that Yahoo has acquired an Indian startup recently – Bookpad. Furthermore, the country has become quite a tech hub in recent years, so Yahoo’s decision to cut down its presence in the area makes little sense.
It’s also interesting to see that there are some new jobs opened for Yahoo India. Five job ads are open, out of which four were listed last month.
Yahoo changed its mind over India
Yahoo has previously invested quite a bit in building out operations in India, looking for software engineers throughout the country. It seemed that Marissa Mayer’s shopping spree would only expand the working force in Yahoo’s many centers around the world.
On the other hand, India doesn’t weight too much on Yahoo’s bottom line and the company hasn’t been doing too great financially. Asia as a whole is a small part of Yahoo’s business, especially when compared to the United States.
If it weren’t for money from selling some Alibaba shares a few years back and for selling some more of that stock during the recent IPO, Yahoo would be doing a lot worse than it currently is. It’s this money that has given Yahoo the necessary power to buy companies left and right.
In fact, Yahoo has disappointed investors during the second quarter earnings call as both the revenue and earnings per share missed analyst estimates. For comparison’s sake, only $177 million (€140 million) of Yahoo second quarter revenues came from Asia, while $775 million (€613 million) from North America.