Yahoo! Stopping its Operations in China

Yahoo! Stopping its Operations in China

Hundreds of workers will be laid off due to Yahoo!'s decision to pull the plug on its Chinese operations. The Yahoo! office in Beijing had the role of serving as a R&D center for the internet giant in the region. Yahoo! said in a statement that the company is trying to align resources and accomplish better cooperation and creativity across the business.

The office, the only one on Chinese ground to represent Yahoo!, opened its door in 2009 when the company was trying to broaden the user base globally. The office was also performing other tasks, like advertizing, researching cloud computing, and other personalized tools. Although Yahoo! did not disclose how many employees it was firing, it was estimated the number was between 200 and 300.

Even though the company pledged to treat the laid off workers with respect, their severance pays will depend on how long they had been working in Yahoo!. Recently the company has been dismissing some of its employees in India and Canada, when almost 600 workers were fired.

These painful moves are seen as cost-cutting attempts by CEO Marissa Mayer to indulge investors who demand the reduction of expenses. Some speculate that the most recent lay-off is the increase of labor price in China, which is twice as much compared to paying workers in India.

In addition, the Chinese government is introducing a series of stricter rules imposed on foreign companies operating in China, like submitting audits and giving source codes.
 

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