Yahoo makes drastic job cuts

Just last week, we reported on rumours that Yahoo was going to cut thousands of jobs.

Now, CEO Jerry Yang has confirmed that the company is going to slash 1000 jobs by mid-February.

The move is despite Q4 earnings that were better than expected, but is part of a wider bid by Yahoo to try and catch up with Google in terms of online searches.

CNN reports that during the company's conference call with analysts, Yang warned that the company faces "headwinds" this year before confirming the upcoming lay-offs.

He added in a written statement: "While we will continue to face headwinds this year, we believe that the moves we are making will help us exit 2008 stronger and more competitive and return to higher levels of operating cash flow growth in 2009".

Yang said the company would make the job cuts as part of a "workforce realignment" programme.

He next revealed that Yahoo's sales came in at $1.8 billion, up 8% from a year ago.

The company reported net income of $206 million, or 15 cents per share, beating analysts' forecasts for 11 cents per share.

Despite this, its stock plunged more than 10% on the news of the job cuts.