Yahoo has announced it intends to cut 10 percent of its staff following disappointing financial results.

The layoffs are the major portion of a $400m (£244m) cost-cutting plan Yahoo is implementing that also includes other measures for achieving what the company called "structural efficiencies".

Revenue for the third quarter increased only one percent to $1.77bn (£1.08bn) compared with the same quarter in 2007. Net income came in at $54m (£32.9m) or $0.04 (£0.02) per share, down from net income of $151m (£92.2m) or $0.11 (£0.07), in Q3 2007. On a pro forma basis, which takes into account one-time items, net income was $123m (£75.1m) or $0.09 (£0.05) per share, down from net income of $153m (£93.3m), or $0.11 (£0.07) per share.

The Q4 staff cuts will be this year's second wave of layoffs for Yahoo, which let go of 1,000 employees in February. Yahoo ended Q3 with 15,200 employees, which means that at least 1,520 of them will lose their jobs between now and the end of the year.

Yahoo also plans to save money by relocating operations to places where it's cheaper to do business, consolidating its property, improving procurement and seeking efficiencies in its technology platform. Cost cutting efforts will continue next year.

In addition, Yahoo cut its full-year revenue expectation sharply from a range of $7.35bn (£4.48) and $7.85bn (£4.79bn) to a range of $7.17bn (£4.37bn) to $7.37bn (£4.5bn).

Yahoo co-founder and CEO Jerry Yang tried to put a positive spin on the results, saying that Yahoo is "well positioned for future growth".

Although revenue was disappointing, Yang pointed out that operating cash flow came in "above the midpoint" of Yahoo's outlook range, thanks to cost management measures this year.

While the revenue forecast was cut due to the "uncertain advertising environment" Yahoo faces, the company is reaffirming its operating cash flow outlook for the year.

"Continued substantial cash flow remains one of our core financial strategies and an important goal," Yang said. "We have the balance sheet strength, liquidity and free cash flow we need to continue to make progress in our core strategies as we work our way through this economic downturn."

Yang also said he was satisfied with the traffic and the audience engagement generated by Yahoo websites and on-line services during the quarter.

NEXT PAGE: Yahoo's plans for the future

Yahoo has announced it intends to cut 10 percent of its staff following disappointing financial results.

Still, the layoffs, Yahoo's plunging stock price and the sagging revenue will no doubt re-ignite the criticism from naysayers who blame Yang and Yahoo's board for causing the collapse of Microsoft's attempts to buy the company earlier this year.

In May, after a three-month pursuit, Microsoft walked away from the deal after a $33 (£20) per share offer was rejected by Yahoo's board, which sought a $37 (£22.5) per share offer.

Financial and industry analysts agree that over the past five years, Yahoo has lost its technology edge, which has caused it to miss major growth opportunities in areas like search, on-line video, blogging, syndicated feeds and social networking.

Yahoo has a number of ambitious technology initiatives that its executives believe will put the company back on track. However, those projects, such as the Yahoo Open Strategy (Y OS) project, have a long term scope.

Y OS, announced in April, is a complex project to open Yahoo services up more broadly to outside developers and to create for end users a single dashboard to manage their Yahoo services and on-line activities in general.

Y OS is still in its early stages, and its initial components haven't all been particularly impressive, like last week's revamp of the Yahoo user profiles, which has been blasted by many people who don't like the changes.