Yahoo is sacking about a third of its staff in India, or some 500 engineers who worked at its Software Development Centre (SDC) in Bangalore, a person familiar with the development said. Effectively, Yahoo is shutting its largest engineering centre in the world after Sunnyvale, California.
This is the biggest layoff at the internet giant since 2012, when it sacked 2,000 employees worldwide.
Yahoo’s operations in India comprise of two legal entities—the SDC, which is effectively an outsourcing unit for Yahoo’s global engineering needs, as well as Yahoo India, which handles editorial, sales, search, small businesses and other support units. The second entity is unaffected by the current, massive, round of layoffs.
The engineers who are being let go are offered five months of pay as severance. A few (less than “five percent”) are being offered positions in Sunnyvale.
A Yahoo spokesperson confirmed it was restructuring the Bangalore operations, but declined to discuss numbers. “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.”
The layoffs will be effected in phases and will be completed by December, a company executive who spoke on the condition of anonymity, said.
The decision has been in the works for a while as efforts to raise productivity and streamline operations to better meet delivery targets have met with limited success, the person said. Its performance with regard to integrating the company’s acquisitions under Marissa Mayer into Yahoo’s own properties have been a sticking point. The delay in replacing Yahoo’s native content management system with that of Tumblr, which it acquired, has been one such.
“The old paradigm where Yahoo thought of itself as a tech company with some media properties is changing. Now Yahoo thinks of itself as a product company that needs to execute well and swiftly,” the executive said.
Under Mayer, Yahoo has cut headcount consistently, even as it has focussed on acquisitions and expanding its media business.
As the news, first reported by NextBigWhat, spread, a number of companies were seen offering jobs to sacked Yahoo employees. Many made pitches in the comments of the NextBigWhat story, while some took to Twitter.