Struggling Internet company Yahoo! said it will lay off 2,000 employees as part of a savings plan, a move that would save $375 million in a year for the company.
"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," the newly appointed CEO of Yahoo, Scott Thompson, said in a statement.
"We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities," Thompson said.
"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," he said.
"As part of that effort, approximately 2,000 people will be notified of job elimination or phased transition," the company said.
Yahoo, which has nearly 14,000 employees, has been struggling to increase its share in the internet market amid tough competition from Google and Facebook.
The move would represent the first major change under new CEO, formerly head of eBay's PayPal unit, who took over in January, following Carol Bartz's departure in September, 2011.
"Yahoo expects to realise approximately $375 million of annualised savings upon completion of all employee transitions," the company said.
The company, which has nearly 700 million users, currently expects to recognise the majority of an estimated $125 to $145 million pre-tax cash charge relating to employee severance in its second quarter financial results.
It may incur additional charges in connection with this action.
