Yahoo will lay off at least 10 percent of its global staff before the end of the year, the company announced on Tuesday, along with disappointing financial results for its third quarter.
The layoffs are the major portion of a US$400 million (£244m) cost-cutting plan Yahoo is implementing that also includes other measures for achieving what the company called "structural efficiencies."
Revenue for the third quarter, which ended Sept. 30, increased only 1 percent to $1.768 billion (£1.08bn) compared with the same quarter in 2007.
The fourth-quarter staff cuts will be this year's second wave of layoffs for Yahoo, which let go of 1,000 employees in February. Yahoo ended the third quarter with 15,200 employees, which means that at least 1,520 of them will lose their jobs between now and the end of the year.
Yahoo also plans to save money by relocating operations to places where it's cheaper to do business, consolidating its real estate, improving procurement and seeking efficiencies in its technology platform. Cost cutting efforts will continue next year.
In addition, Yahoo cut its full-year revenue expectation sharply from a range of $7.35 billion (£4.48bn) and $7.85 billion (£4.79bn) to a range of $7.17 billion (£4.37bn) to $7.37 billion (£4.49bn).
Yahoo Co-Founder and CEO Jerry Yang tried to put a positive spin on the results during a conference call on Tuesday, saying that Yahoo is "well positioned for future growth."
He said business results were mixed, with some segments doing well, like U.S. search advertising, while others did not, like U.S. branded display ads and the general performance of the company in Europe and Asia.
Yang also said he was satisfied with the traffic and the audience engagement generated by Yahoo websites and on-line services during the quarter.
Still, the layoffs, Yahoo's plunging stock price and the sagging revenue will no doubt re-ignite the criticism from naysayers who blame Yang and Yahoo's board for causing the collapse of Microsoft's attempts to buy the company earlier this year.