Yahoo Downsizes in the U.S. and Hires in India

Yahoo’s decision to purge 1000 staff members primarily from its United States operations (some in Europe) has been hot news this year. What we didn’t know when the announcement was made was that Yahoo (YHOO) was planning to expand its base in India.

Yahoo is establishing a new lab in Bangalor with a focus on long-term research. The lab will be “a center of excellence for next generation search and advertising technologies, focused on making the Web more relevant and simple for users and advertisers.”

According to the Washington Post, the new lab will be headed by Rajeev Rastogi (previously the head of Bell Labs India) and will hire “sociologists, micro-economists, and computational scientists among other categories of staff for the lab.” The exact number of employees the new lab will hire was not disclosed, however the figure is believed to be in excess of 500 people.
The move towards lower cost Indian operations is far from new, and Yahoo already has 1500 employees in India. The decision may raise eyebrows in the United States where offshoring jobs is still fairly unpopular in the broader community, despite its popularity in the corporate and startup sectors.

Comments

[former yaho...:]

The quality of labor in India has become really a question. Yahoo can reduce the cost for a short term - year or so. But is also can reduce the cost cutting the growing number of employees coming from India to US that are feeling up redundant structures.
I am not trying to point that laborers from Indian are not good workers or lack mental ability to finish/complete the job rather 'doing the job'.
What I am trying to point that large corporation, as Yahoo as an example, has been at the stage that redundant structures are already taken place and performance as well as quality of work had been reduced dramatically, as well as moral aspect of the company.
Therefore, moving projects or support to India won't really help to solve the problem to get back competitive and flexible high tech company.It has become bureaucratic and highly political organization. Whether it will be adding workforce in India or USA - irrelevant. if the goal is to cut the cost versus optimize on investment into existing employees - it is already unhealthy not only for moral in the company but also will reduce creativity and open minded thinking - which made Yahoo as it is nowdays.
Based on my experience, the amount of work that can be done in USA for 1 months can be done in India for 18 months or longer with less quality and control of possible enhancements. Overall, any product development, not support, will cost company much more $ than if it would be handled in USA.
Another side of the coin that , and I hope I am not inventing the wheel, companies that have been moved to India have no other than Indians in the hierarchies of work force in USA.
That also have significant impact on creativity, productivity, career growth for employees that are not from India. I would like to underline that I have nothing against India and most employees from India that I had a priviledge to work with were very professional and educated people but it becomes obvious for last 10 years that groups led by Indian define race criteria, i.e. Indian versus any other race, when hiring or building the team.
I have nothing against Indian race or people from India.But I think when company, like Yahoo, have started moving groups to India it won't solve the problems inside the company - it can only increase those issues as well as will have direct impact on overall productivity not mentioning the opportunity for employees,not Indian decent, to grow in the company.
Overall, companies that have moved to India, had reduced the salary per employee but I doubt that they have reduced the overall cost, including the cost of infrastructure and networks.
Yahoo is definitely is under the high pressure to restructure and eliminate redundancy. But instead of doing it by eliminating redundancy and increasing quality of workforce in USA, it looks like it has been doing the commonly expected 'things' which are not good for a long term business. and of course, Yahoo is neglecting the most valuable investment - keeping professional employees onboard.

2008 Mar 04 07:52 PM