After weeks of rumours of a pending reorganisation, Yahoo announced this morning that the company is laying off about 2,000 workers.
Yahoo will begin informing employees of the layoffs and "phased transitions" today, according to a posted statement. The company expects to save $375 million (£236 million) from the job cuts. According to its Web site, Yahoo had about 14,100 full-time employees in the third quarter of 2011.
"Today's actions are an important next step toward a bold, new Yahoo - smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require," said Scott Thompson, CEO of Yahoo, in a statement. "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities."
Thompson, the former president of eBay's PayPal unit who took on Yahoo's top seat just this past January, also said he's pushing to put the company's users and advertisers first.
"We are moving aggressively to achieve that goal," he added. "Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo."
California-based Yahoo did not say from which parts of the organisation the layoffs would occur.
Earlier this month, there were reports that Yahoo executives were planning a major corporate reorganisation that could include thousands of layoffs.
For the past few weeks, industry analysts have said that Yahoo could be looking for ways to cut costs in an effort to to attract buyers. There was also speculation that Thompson was making changes to right the ship and rebuild.
Yahoo, an Internet pioneer that has fallen behind companies like Google and Facebook, has been in a state of turmoil in recent months.
Corporate upheaval began last September when former CEO Carol Bartz was ousted. That prompted rumours that Microsoft and Google were both making moves to buy Yahoo.
Since then, Yahoo co-founder Jerry Yang has left the company, followed by board chairman Roy Bostock and three other directors.