As the Mayer era continues at Yahoo!, its Egypt office is the latest element to be scrubbed out and rethought. Today, Yahoo! announced that it will shut down its operations in the country, while continuing to operate in Amman and Dubai. In an internal memo, the company revealed that the decision was part of a broader strategy to consolidate its global presence:
"Today, Yahoo announced that we plan to close our Cairo office at the end of this year. This decision is part of Yahoo’s global efforts to streamline operations, encourage more collaboration and innovation by bringing more Yahoos together in fewer locations, and build a strong global business that is set up for long-term growth.
Cairo has been a good home to Yahoo, and we’ve built a hardworking and professional team there, who have served our users and advertisers well. We are grateful for their work and thank everyone for their contributions. All of our Cairo employees will be treated with respect and fairness through this transition and we are offering separation packages to all employees which exceed local law requirements.
The Middle East and Africa (MEA) region remains an important market for Yahoo, and we will continue to serve our users and advertisers across the MEA region with the same great products and experiences they have come to expect from Yahoo Maktoob from our main operations in Amman and Dubai."
Our sources on the ground say that while a year ago the company had around 200 staff members, which had scaled down to 120 before today's announcement. Rumor has it that 100 employees will be let go, mostly from ad sales and ad techincal support divisions; the content team is reportedly the least affected. The remaining 20 employees will be relocated to Dubai, Jordan, and Dublin, Ireland.
After spending over $1 billion on several acquisitions this year, including news aggregation platform Summly and blogging platform Tumblr, Yahoo also cut several services, including AltaVista, Yahoo RSS Alerts, and Yahoo Downloads, as part of an ongoing effort to focus the company (and bring its fiefdoms under control).
This office closure comes at a particularly bad time for Egypt,
where recent strife has cost the startup
community a few of its innovators and made it difficult
for most companies- let alone small startups- to grow.
"Yahoo came to Egypt all guns blazing, poached staff from other media, came in and cut ad rates by more than half, put little guys out of business, and then buggered off," says Con O'Donnell, the founder and Ex-CEO of Sarmady, a digital publishing and marketing company based in Cairo. "The experience of Yahoo in Egypt is not a happy one, and it is a tragic ending for scores of great talent that are now out of a job."
Yet with local startup accelerators honing their models to increase their effectiveness, that talent may be able to find new avenues for building Egyptian companies with global traction.