Yahoo has announced it will make approximately 2,000 of its employees redundant in order to reshape the company.

The firm owned by Microsoft expects to save $375 million annually from the move as it looks to the future. Yahoo said it wants to be 'smaller, nimbler and more profitable' in order to innovate and react quicker to the industry.

Scott Thompson, CEO of Yahoo said: "We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. Our goal is to get back to our core purpose — putting our users and advertisers first — and we are moving aggressively to achieve that goal,"

"Unfortunately, reaching that goal requires the tough decision to eliminate positions. We deeply value our people and all they've contributed to Yahoo!."

The Google rival said it will focus on profitability and growth while radically simplifying how it launches and manages its portfolio of products. It intends to grow by responding quicker to customer needs and competing better in 'areas where it can win' by restructuring its efforts.

More information about Yahoo's future direction will be provided along with its financial results later this month.

Yahoo said: " the company will intensify efforts and redeploy resources globally, all focused on increasing shareholder value."