The potential for tech companies to grow and profit in China is huge. Microsoft’s recent announcements have had their focus on China and even Apple at one pointed acknowledged that China is one of their key markets. In fact during the Apple Watch presentation at their Spring Forward event, Apple showcased their new China stores and even ran some China-made apps which apparently sat very well with the local Chinese media.Unfortunately the competition is so stiff that despite China having huge potential, not every company can thrive and according to a report from The Wall Street Journal, it looks like Yahoo will be pulling the plug on their operations in the country. Yahoo has since confirmed this and have also announced job cuts which will see Yahoo laying off anywhere between 200-300 employees at Yahoo China’s office in Beijing.
These layoffs follow earlier layoffs made by Yahoo in a bid to cut costs. With the latest round of layoffs, it has been estimated around 700-900 Yahoo employees have been let go since October last year, including those from their US office. Yahoo has also been steadily reducing their footprint in China when back in 2013, they told Chinese users that they would stop offering Yahoo Mail services to users in China.
Instead Yahoo directed existing users to Alimail, an email service offered by Alibaba who is one of Yahoo’s partners in the region. In a statement released by Yahoo, “We will be consolidating certain functions into fewer offices, including to our headquarters in Sunnyvale, California.”