Yahoo is set to axe around 2,000 jobs, representing 15% of its workforce, according to reports.
According to tech blog AllThingsD, which first unveiled the scale of the job losses, an announcement from the firm is expected soon.
The cuts will be made across the company, although Yahoo’s product division is expected to be hardest hit.
The move will add to the internet giant’s woes as it struggles to compete with rivals Google and Facebook.
The California-based company, which employs more than 13,000 employees across 25 countries, is already under intense pressure from its shareholders to carve out a new business strategy.
The latest round of job cuts were first mooted earlier this month, with the suggestion that regional operations and marketing would bear the brunt of the losses.
Chief executive, Scott Thompson, was parachuted in at the start of the year, after the previous incumbent, Carol Bartz had failed to stem the firm’s decline.
Last September, Bartz was fired over the phone, marking the end to a rocky 19-month tenure that was marred by stagnation and a bitter rift with its Chinese partner, Alibaba Group.
Ms Bartz later described the Yahoo board as “doofuses”.
Microsoft attempted a $47.5bn (£30bn) takeover of Yahoo in 2008 which was rejected by co-founder Jerry Yang.
