The American multinational internet corporation, Yahoo Inc., has decided to end its research and development (R&D) operations in the most populated country, People’s Republic of China. Yahoo news indicated that the internet corporation would soon close its Beijing based center in an attempt to reduce its costs. The company would perform the same functions in offices situated in other locations. It is expected that the closure of the office would disturb 300 people, as the internet giant currently employs the same number of people in its Chinese office. It currently employs more than 12,000 workers collectively in all its offices.
In 2005, the company gave the control of its China-based operations to its corporate partner and Chinese electronic commerce company, Alibaba Group. It halted its operations in the People’s Republic of China in 2013. Yahoo news today reported that the 52% fall in the profits of Yahoo Inc. has forced it to find methods for minimizing its cost, as investors are interested in earning huge amounts of money. Chief Executive Officer of the company, Marissa Mayer, has stated that the business is concentrating on operational efficiency by keeping its number of employees almost the same as it had invested in manufacturing products that required recruitment of staff.
latest Yahoo news testifies that the Chinese stakeholders have opposed the corporation’s decision to end its R&D department based in the second largest economy. As the managing director of China Market Research Group, Shaun Rein, has stated that the businesses based in China would not be advertising on Yahoo. The rivals of the Yahoo probably appreciate this statement, as a fall in the demand for the services of the firm is expected to provide the opportunity to increase their market share of rivals.
The closure of the department in China is prospective to end the criticism faced by the officials of Yahoo Inc. Its executives came under criticism from American lawmakers and human rights workers when it provided details regarding journalist, Shi Tao, who was later imprisoned for a decade. Apart from the China office, other offices of the internet business have also suffered from closure, as it also closed its offices in Amman and Jordan.
Yahoo Inc. is not the only firm to shut down its offices in the Chinese capital. Last month, the game manufacturing firm, Zynga Inc., said that it would close its office in Beijing. Now it has yet to be seen that to what extent the closure of offices is likely to help the American firm in cost-cut and profit maximization.
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