Yahoo announced Wednesday plans to lay off 2,000 employees in a major restructuring.
New CEO Scott Thompson said the action is "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."
"Our goal is to get back to our core purpose -- putting our users and advertisers first," Thompson added. "Unfortunately, reaching that goal requires the tough decision to eliminate positions."
The Sunnyvale, Calif. company will begin the process of informing employees today. Approximately 2,000 people will be notified of job elimination or phased transition in a move that will save the company an annualized $375 million.
Yahoo will take a $125 million-$145 million charge for employee severance, the bulk of which will be booked in the fiscal second quarter. It may incur additional charges. More details will come when the company reports its latest financials on April 17.
Yahoo didn't discuss other details of the revamp except to say generally that it intends to respond more quickly to customer needs and compete more effectively "in areas where it can win," and has targeted key parts of the business to focus on to boost profits and growth.