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Reports suggest Yahoo has drawn up a list of "1,500 to 2,500 jobs that may be eliminated in the next two weeks", though the company has declined to comment on the areas which will be affected.

Yahoo chief executive Jerry Yang has already laid out his strategy for reversing the company's fortunes, citing a desire to make Yahoo the "starting point" for more web users, ensuring its online adverts are a "must buy" proposition and the need to open up its sites to outside developers.

Reports suggest that anything that does not fit into these three key areas is likely to feel the pinch.

Yahoo is expected to make announcements on job losses to coincide with year-end results on 29 January.

However, writing on Silicon Valley Insider, former Wall Street analyst Henry Blodget says Yang is still deciding whether to go ahead with the layoffs, and could reverse the position if stock prices rebound.