Yahoo will begin layoffs of thousands of employees next week and will announce a plan to restructure the company the week after that, according to a media report.
Yahoo declined to comment.
The layoffs, which will not take place all at once, will mostly affect Yahoo's product, research and marketing groups, according to the report in the blog AllThingsD, which cited anonymous sources.
Under a plan still being finalised, Yahoo would reorganise its business to create a global media division, while product development would move to decentralised units. The company is figuring out the future of its advertising technology business, as well as its search business, according to the report.
The layoffs and reorganisation would mark the most significant moves by new Chief Executive Scott Thompson, the former PayPal president who took the top job at Yahoo in January.
Yahoo, which ended 2011 with roughly 14,000 employees, has seen its revenue decline amid competition from Web rivals Google and Facebook.