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The US-based firm revealed that it intends to reduce employee numbers by five per cent, a move that will affect around 700 workers.
Yahoo! explained that the measure is part of a range of steps that are being taken to cut costs, with those involved expected to be informed within the next two weeks.
The news came as the company reported a decline in revenues of 13 per cent for the first quarter of the year, compared to the same three-month period in 2008.
Chief executive Carol Bartz remarked: "Yahoo! is not immune to the ongoing economic downturn, but careful cost management … allowed our operating cash flow to come in near the high end of our outlook range."
Last week, Sony Ericsson revealed that a pre-tax loss in the first quarter of 2009, prompting a decision to make 2,000 job cuts.
