Yahoo shuts down China office, eliminates 350 workers

BEIJING, March 19 (UPI) -- U.S. search engine Yahoo is closing its China office after years of tough dealings with the Chinese government but the move was aimed at cutting costs.

The BBC reported Yahoo's Beijing research center is to eliminate about 350 jobs. It is the only office that remained open after Yahoo sold its Chinese operations to Chinese e-commerce giant Alibaba in 2005.

The firm was entangled in controversy when the Chinese government requested information on the personal data of Chinese dissidents, including a journalist, who was sentenced to 10 years in prison for releasing government documents to an overseas pro-democracy website.

Yahoo's China shutdown follows an earlier announcement of plans to spin off the company's stake in Alibaba, valued at more than $30 billion and traded on the New York Stock Exchange.

The company has been adjusting to a web search culture centered on mobile devices, a development that also attracts less advertising revenue for the firm.

Yahoo had 12,500 employees at the end of 2014 and the company has made key acquisitions and new investments since Marissa Mayer assumed the chief executive position in July 2012, but revenue at Yahoo has not grown substantially since 2008, Bloomberg reported.

China is an even tougher market for Yahoo, because of the presence of "well-funded, aggressive home-grown players," said Shaun Rein, managing director of China Market Research.

Previously, Yahoo had cut one percent of its workforce in January. The 125 employees included editorial staff in China. Positions were also eliminated in Amman, Jordan and Bangalore, India.

The recent development at Yahoo rides an ongoing trend of U.S. technology companies reducing or shutting down operations. In February, game company Zynga Inc. closed its Beijing office and let 71 workers go and Microsoft announced in December phone factories would be shut down and consolidation would focus on its plants in Vietnam.