Around 70 senior managers face relocation or losing their job as a result of the move, nicknamed Operation Toblerone.

Yahoo employs 700 staff in the UK. The Financial Times reports that employees were told by email on Thursday that they have 30 days to make up their mind and follow the firm to Switzerland.

Yahoo said in a statement that the decision was part of its ongoing international business strategy to increase competitiveness, deliver financial results, performance and efficiencies.

Sources close to the firm, however, said that the relocation to Switzerland was heavily influenced by corporate tax motives. Yahoo is struggling in the European market where it has a market share of just 3 per cent of search engines.

Yahoo’s rival Google, the search engine company, recently decided to base its European engineering base in Zurich. Games publisher Electronic Arts moved its European head office from outside London to Geneva in 2006.

Yahoo expects to complete the head office move in 18 months’ time. The firm is fighting a bid by Microsoft to take control of the company.

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