Yahoo lays off up to 1,000 workers, earnings plunge

Yahoo's financial funk deepened at the end of 2007, prompting the slumping internet icon to draw up plans to lay off as many as 1,000 workers, an Associated Press report said.

The Associated Press report said the company disclosed the upcoming 7% reduction in its 14,300-employee work force while reviewing a 23% drop in fourth-quarter profit and a cautious 2008 outlook.

The bad news sent Yahoo shares skidding to their lowest levels in more than four years, the report said.

In a prepared statement, Yahoo CEO Jerry Yang warned of looming 'headwinds,' indicating that the company's tortuous turnaround efforts aren't likely to pay off this year.

'I'm surprised by how slowly they seem to be moving,' the Associated Press report quoted Cantor Fitzgerald analyst Derek Brown, as saying. 'Yahoo still has quite a bit of work ahead.'

Yahoo shares dropped $2.09, or more than 10%, in extended trading Tuesday after finishing the regular session at $20.81.

The company's market value has plunged more than 50% since the end of 2005, wiping out $35 billion in shareholder wealth, the report said.

Yang, Yahoo's co-founder, took over as CEO seven months ago in an attempt to shake things up, but his overhaul hasn't impressed Wall Street so far.

The mass firings represent Yang's most dramatic move yet, the report added.