The job cuts are thought to include marketing roles alongside its products organisation, PR and research teams.
Yahoo! says it will intensify efforts on a select group of core businesses, the platforms that support those core businesses – although it does not specify what those core businesses are – and the data that drives deep personalisation for users and ROI for advertisers.
CEO Scott Thompson says the reorganisation marks the next step in the company becoming “smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require”.
He adds: “Our goal is to get back to our core purpose – putting our users and advertisers first – and we are moving aggressively to achieve that goal.”
The company claims the staff lay offs should save it around $385m (£236m) a year.
It says it will provide more information about its future direction when it releases it latest earnings update on 17 April. Yahoo! reported a 13% drop in revenue in the previous quarter to January 2012.
Former PayPal president Thompson was appointed as Yahoo! CEO earlier this year, replacing Carol Bartz who was ousted from the company in September, to try to restore the “momentum” needed for the business to return to growth.
Meanwhile, the company is currently involved in a patent dispute with Facebook. Yahoo! sued Facebook last month accusing the social network of infringing 10 of its patents, including those for online advertising. Facebook countersued Yahoo! this week for allegedly violating its patents for display ads, photo sharing and content personalisation.