New Delhi: Global technology giants Microsoft and Yahoo have remained non-committal on possible job cuts in India after a possible tie-up between the two companies.
The merger and acquisition deals between companies present in similar businesses usually leads to job reductions as the companies seek synergies by cutting on jobs and facilities that have similar profiles.
Microsoft and Yahoo are estimated to have about 10,000 employees in India, collectively. With Microsoft making a $44.6 billion takeover bid for acquiring worldwide operations of Yahoo, it could not be immediately ascertained what would be the impact of such a deal on India operations of the two companies, including on the job front.
The officials of the two companies in India declined to comment on the India impact, saying they were yet to hear from their headquarters on what such a deal had in store for their businesses here.
When asked whether the deal would lead to job losses in India, spokespersons for both Microsoft and Yahoo declined to
comment. The deal is believed to be primarily aimed at leveraging their position in the fast growing online advertisement market, currently dominated by Google.
Google also declined to give any comments on the competition, which it is expected to face in the near future in the country.
On the Microsoft bid to acquire Yahoo, research firm Gartner said although the synergies between the two companies are certainly great, the merger would also raise the question of how effectively they would continue their operations.
The online advertising business requires a significant level of account service and even the perception of a diversion could wind up delivering business to their competitors, Gartner Research Vice President Andrew Frank said in a statement.
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The online advertising market is growing at a very fast pace, and could reach $80 billion by 2010 from over $40 billion in 2007. With Google emerging as one of the biggest beneficiary of this market, analysts believe a combination of Microsoft and Yahoo was imminent to take on the competition from the Internet search giant.
The speculations have been doing the rounds for quite a few months about the merger of two giants. The combined entity would create a more competitive firm, providing superior value to shareholders, better choice and innovation for customers and partners, Microsoft said.
Microsoft's proposal would allow Yahoo shareholders to OPT cash or a fixed number of Microsoft shares, with the total consideration payable to Yahoo shareholders consisting one-half cash and one-half Microsoft common stock. The offer represents a 62 per cent premium above the closing price of Yahoo shares on January 31.
The company said it believes the proposed combination would receive all necessary regulatory approvals and the proposed transaction would be completed in the second half of calendar year 2008.
Microsoft's shares were down 5.4 per cent at 30.85 dollars on Nasdaq, while those of Yahoo was up 45.7 per cent at $27.95.
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