Yahoo confirmed today that 2,000 employees will be laid off later this year.
Chief executive Scott Thompson is sweeping out over 14 percent of the Yahoo workforce that no longer fit into his plans as part of Yahoo's long term evolution.
The forced exodus will result in a $125--$145 million in charges, and will save the company around $375 million annually.
Thompson hinted at his plans for a "smaller, nimbler, more profitable" Yahoo, in a statement released earlier today. He added that Yahoo will be "getting back to our core purpose" by "redeploying resources to our most urgent priorities" by putting its thousands of advertisers and 700 million users first.
Those who will be losing their jobs will be receiving their pink slips today. The product and marketing divisions are to be mostly affected, along with technology research, but many employees will remain on until their current projects are completed.
Yahoo executives warned that some advertisers may decide to pull back on spending on Yahoo in light of the employee layoffs and company reshuffle. It may even sell some of its assets, including its advertising platform, some have suggested.
But the company has been remarkably shy about sharing its long-term plans. Considering only a year ago Yahoo was looking for potential buyers, it can hardly fill shareholders with confidence when even the company doesn't know what it's plans are just yet.
More details on the strategy behind the employee layoffs will be given on April 17 during its first-quarter results.
After today, Yahoo's employee numbers will drop from 14,000 to an estimated 12,000 worldwide. It is thought many of these jobs will come from the Europe, the Middle East and Africa region, where Yahoo has its European headquarters in Switzerland.
This is the sixth mass layoff of jobs in the past four years under three separate chief executives, but this by far inflicts the most damage on employee numbers. In 2008, as part of Yahoo's bid to weather the global financial crisis, it laid off 1,500 workers.
Yahoo has been developing its strategy from a marketing and portal company to an advertising business. The once-search giant derives most of tis annual revenues from advertising at more than $4 billion.
Yahoo's stock is up just shy of 1 percent in trading this morning.