Internet firm Yahoo has started a
fresh set of layoffs in India, affecting hundreds, as it seeks to consolidate
its product engineering teams at its headquarters in Sunnyvale. While senior
executives will be offered a position in Sunnyvale, a majority have been handed
pink slips, said a source.
India operations will be reduced to
support and operations functions. Yahoo India R&D head Hari Vasudev and a
few other senior executives have been asked to move to the US. Amit Dayal, vice
president of search and marketplaces, has already shifted there.
Ø Hiring stopped a year ago
Vasudev had taken over from the then
Yahoo India R&D head, Shouvick Mukherjee, who himself had moved to
Sunnyvale in 2013.
“The writing was on the wall. They’d
stopped hiring about a year ago and the layoffs picked up speed in the last
couple of weeks,” the recruiter said. Yahoo said in a statement that it will
continue to have a presence in India but is looking to consolidate some teams
into fewer offices.
In 2002, Yahoo was one of the first
multinational corporations to set up research & development in India and
others such as Google followed suit. At the time, it was Yahoo’s second-largest
R&D centre outside the United States.
Yahoo appointed former Google
executive Marissa Mayer to turn around the company’s fortunes in 2012. Under
Mayer, Yahoo has bought social networking platform Tumblr, mobile analytics
firm Flurry and new aggregator Summly. It also received a $5 billion windfall
from the IPO of Chinese ecommerce company Alibaba.
Experts pointed out that a few other
companies have moved major product development out of India, including Google,
Cisco, Broadcom and Texas Instruments that have shifted parts of their product
engineering closer to their headquarters.
Sharad Sharma, former CEO of Yahoo
India R&D, said the trend is due to a combination of factors such as
politics, changing structure of technology teams and the perception in Silicon
Valley.
“It is not acceptable any more in the
United States to hire in India at their expense,” said Sharma. Technology teams
have also become smaller with each having specialist roles. “The lack of
specialists for each team means such teams aren’t getting created anymore and
it is affecting India adversely,” said Sharma, founding member of software products
thinktank iSpirt.
The success of companies like Apple
and Facebook in emerging markets has also created the perception that products
for emerging markets can be made from the Valley
Large companies have started focusing
on fewer products and that could be one reason, said an industry expert who
requested anonymity. The growth of agile product development methodology also
requires more and more co-location, he said.
Pari Natarajan, head of market
expansion advisory firm Zinnov, however, said that India remains an attractive
destination for companies to set up offshore R&D centres.
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