Just ahead of its Q3 earnings, Yahoo is laying people off in its international business. Specifically, it is downsizing its software development center in Bangalore, India. We understand that 400 people, mainly working in product engineering, have been affected.
Yahoo has issued a statement to us confirming “consolidation” into fewer offices:
“As we ensure that Yahoo is on a path of sustainable growth, we’re looking at ways to achieve greater efficiency, collaboration and innovation across our business…To this effect, we’re making some changes to the way we operate in Bangalore leading to consolidation of certain teams into fewer offices. Yahoo will continue to have a presence in India and Bangalore remains an important office.”
Earlier today one local blog, The Next Big What, pegged the number at around 2,000 employees, which would have been a big deal if it were correct, ranking up with Yahoo’s biggest-ever workforce reductions (the last 2,000 round was in 2012, under previous CEO Scott Thompson). But at 400, the number is some ways smaller than that, if still a significant amount, and a big deal especially to those affected. Prior to today, Yahoo employed about 1,100 people in the country, out of 12,000 globally.
India is the only country being affected with today’s layoffs.
As with Yahoo’s closure of its offices in Carlsbad, California, last month, the company is making relocation offers to some of the people being affected, with the aim to bring software engineers closer to the company’s Sunnyvale, California, operations. Others are reportedly getting between five and 10 months of redundancy pay. The layoffs will take effect November 7, one month from today.
Meanwhile, there are currently five job ads posted for Yahoo roles in India, four of which were listed last month (and one that’s been there for over a year).
India — one of the fastest growing mobile markets in the world today — has been both a target for Yahoo services as well as a place where Yahoo has developed its business.
The company has launched services specifically targeting mobile consumers in the country but it has also found that some, such as this stab at a social network and an entertainment portal, have not lived up to expectations and have been shut down.
On the other hand, Yahoo has invested in building out operations in India, specifically tapping into software engineering expertise in the country.
That has also more recently also started to extend into CEO Marissa Mayer’s extensive acquisitions play to build up Yahoo’s talent and product pool.
The news comes less than two weeks after Yahoo announced that it would acquire Bangalore-based Bookpad, its first acquisition in India. Bookpad makes file editing and collaboration software.
Nevertheless, it is at the same time not too surprising to see these layoffs when you consider the wider role that India is contributing to Yahoo’s bottom line, and also the company’s bigger push for collaborative working.
Last quarter, Yahoo disappointed Wall Street with revenues and earnings per share that both missed analyst estimates. Right now, Asia remains a far smaller part of Yahoo’s business than the U.S. Of the $1.04 billion Yahoo posted in revenues in Q2, $177 million came from Asia, while $775 million came from North America. Indeed, Yahoo’s biggest benefits when it comes to Asia has been in its investments there, specifically around its stake in recently listed Alibaba.
At the same time, Mayer made it clear a while back that she favors the kind of synergy and development that comes from people working side-by-side. Now that line of thinking is taking a more geographically focused turn.
Updated with more accurate numbers of employees affected and other details.