Yahoo shutting down China office in latest cost-cutting move

AP Photo/Eric RisbergYahoo President and CEO Marissa Mayer delivers the keynote address at the first-ever Yahoo Mobile Developer Conference Thursday

AP Photo/Eric RisbergYahoo President and CEO Marissa Mayer delivers the keynote address at the first-ever Yahoo Mobile Developer Conference Thursday

Yahoo is closing its research and development center in China as CEO Marissa Mayer tries to placate shareholders pressuring the Internet company to cut costs while it struggles to bring in more revenue.

The Beijing operation's responsibilities will be shifted to other Yahoo Inc. offices, according to a company statement released late Wednesday. Yahoo didn't specify how many people will lose their jobs in China, but pledged to treat all the workers “with respect and fairness.”

The closure will mark Yahoo's exit from China, where the Sunnyvale, California, company has been winding down since turning over its operations to Alibaba Group in 2005.

That $1 billion deal gave Yahoo a lucrative stake in Alibaba that is currently worth $33 billion. Yahoo is preparing to spin off its Alibaba holdings into a separately traded company later this year, removing an asset that deflected attention from the challenges facing Yahoo's own businesses.

Yahoo hired Mayer in July 2012 to engineer a turnaround, but so far she hasn't been able to boost the company's revenue even though advertisers have been shifting more of their spending to the Internet and mobile devices. Yahoo's revenue declined by 1 percent to $4.6 billion last year.

New York hedge fund Starboard Value, an activist investor that owns a 0.8 percent stake in Yahoo, is among the shareholders who believe Mayer needs to trim expenses. In an open letter released earlier this month, Starboard Value Managing Member Jeffrey Smith urged Mayer to cut costs by about $450 million annually. Smith is also among the Yahoo shareholders who called upon Mayer to spin off the Alibaba stake to avoid triggering a huge tax bill from sale of the stake.

In a January conference call, Mayer emphasized that Yahoo's payroll has remained roughly the same size since she arrived, even though the company had inherited more than 1,000 employees through acquisitions completed during her reign. She also pointed out that Yahoo had closed about a dozen offices while phasing out about 75 products during her tenure.

“We will continue to seek and execute on efficiencies that we find on an ongoing basis as an effort to better align our resources with our strategy and growth opportunities,” Mayer pledged.

AlibababusinessBusiness & Real EstateChinaMarissa Mayer

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Dave Hodges, pastor at Zide Door, the Church of Entheogenic Plants that include marijuana and psilocybin mushrooms, holds some psychedelic mushrooms inside the Oakland church on Friday, July 22, 2021. (Kevin N. Hume/The Examiner)
Psychedelic spirituality: Inside a growing Bay Area religious movement

‘They are guiding us into something ineffable’

San Francisco Police stand guard outside the Mission Police Station during a protest over the Minneapolis police killing of George Floyd on Saturday, May 30, 2020. (Kevin N. Hume/S.F. Examiner)
Fired: California bill aims to decertify police for serious misconduct

By Robert Lewis CalMatters On a Wednesday afternoon in April 2018, Gardena… Continue reading

The Giants and Dodgers face each other again following a May series the Dodgers swept; Dodgers shortstop Gavin Lux caught stealing by Giants second baseman Donovan Solano at Oracle Park on May 23 is pictured. 
Chris Victorio/
Special to The Examiner
Giants vs. Dodgers: What you need to know before this week’s huge series

By Chris Haft Special to The Examiner That grinding noise you’ll hear… Continue reading

Gov. Gavin Newsom announced Monday that state employees and health care workers must be vaccinated or undergo weekly testing and wear masks. (Photo by Anne Wernikoff, CalMatters)
California orders vaccine or testing for health care workers, state employees

By Ana B. Ibarra CalMatters Amid an uptick in COVID-19 cases and… Continue reading

Jeremy Kahn and Monica Ho are excellent in San Francisco Playhouse’s production of Lauren Yee’s “The Song of Summer,” being presented live and online. (Courtesy Jessica Palopoli)
Touching relationship at heart of ‘Song of Summer’

Lighthearted SF Playhouse show ‘feels right for this moment’

Most Read