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 was planning to expand its base in India.

Yahoo is establishing a new lab in Bangalore 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.

Really interesting comments on the articles:

1. Yahoo can fire expensive USA workers and hire for less in India. Other U.S. companies can lay off their expensive U.S. workers and outsource jobs to third world countries for less money. Then, these expensive US workers with massive student loans won’t’ find jobs because they are in India. They will be denied opportunities for the remaining jobs here because their student loans are in default (listed on their credit report) as a result of being out of work. ( U.S. companies will not hire you because of your credit report. You might steal something.) The remaining jobs will be $8-9/hour retail jobs. They will not hire these out of work workers because they are overqualified and might quit. So they hire illegals instead. These out of work professionals will have lot’s of time to surf Techcrunch and complain about outsourcing. (This is from US)

2. It will be interesting to see what tangible benefits comes out of this for Y!. The value proposition for offshoring to India has been in free fall of late. China looks attractive on paper but most will confide that in practice China is VERY difficult to do software development in due to language/Time zone/Govt./IP protection problems. Eastern Europe seems to be the best offshoring alternative right now and Y! might do better to try this lab there. I have to agree on the assessment of the quality of IP that comes out of India. Over a billion people have had an opportunity to create the next big thing for the last 10+ years with no determinable results. (Another one from US)

3. “Over a billion people have had an opportunity to create the next big thing for the last 10+ years with no determinable results.” Big result needs not only talent but Funding! There is immense talent in India (silicon valley guys might agree with this) but they lack in funding. Yahoo has recognized just that! Microsoft, Google already have R&D centers in India. This picture might change in another 10 years! (From India)

4. Remember, your corporate leaders and politicians have told you that the only jobs that are being outsourced are the LOW end jobs. Advance jobs such as research and innovation will remained in the U.S. Guess again. Anyway, I think it’s about time that the U.S start sharing it’s wealth and technology with the rest of the world. It’s about time that the other countries can take advantage of the intellectual capital that the U.S has held on for itself for a long time (half of which is anyway Indian). Sharing is good, it’ll only make this world a better place. (One more from US)

- DeTimes