Yahoo! to Slash 10% of Workforce (Update)

SAN FRANCISCO -- In an effort to reduce costs during a tough economic climate, Yahoo!(YHOO Quote) announced that it would slash 10% of its workforce, leaving more than 1,500 people out of a job.

The news came as Yahoo! delivered third-quarter results that matched Wall Street earnings estimates but fell short of revenue expectations. The company also lowered its full-year revenue guidance as pressure on its premium display advertising continued to mount.

Shares of Yahoo! were up 7.3% to $12.95 in after-hours trading.

The company said its goal is to reduce its current annualized cost run rate of approximately $3.9 billion by more than $400 million before the end of the year. The job cuts will come on top of the 1,000 that Yahoo! had already authorized in January.

Yahoo! Chief Executive Jerry Yang said the company has been looking for ways to lower costs all year long, including a slowdown in hiring as well as a shift of some of its jobs to lower-cost regions like Eastern Europe, India and Southeast Asia.

"We do think that taking aggressive actions around our cost structures will unlock shareholder value," Yang said on a conference call with analysts on Tuesday, in a response to a question about how the company planned to add value to its business. "Yahoo! has been growing in terms of a cost base over a significant period of time and we have some areas where efficiencies can be realized."

For the third quarter, Yahoo! reported a profit of $54 million, or 4 cents a share, falling from $151 million, or 11 cents a share, a year ago in the same period.