Yahoo has all but confirmed reports that it will be making cuts to its workforce.

Reports in The New York Times cited sources within the company as saying that Yahoo plans to lay off hundreds of employees as part of an ongoing reorganisation.

The web giant declined to address the report directly, but did say that it plans to "reduce" some of its operations.

A Yahoo spokesperson told vnunet.com that the company has "embarked on a multi-year transformation that includes tough decisions about the business to help the company grow".

"Yahoo plans to invest in some areas, reduce emphasis in others, and eliminate some areas of the business that do not support the company's priorities," said the statement.

The possibility of job cuts has hardly been a secret. Yahoo executives admitted in late 2006 that the company had lost focus and needed trimming in order to compete with Google and Microsoft.

The company made good on its promise of a shake-up last July when chief executive Terry Semel was shown the door in favour of co-founder Jerry Yang.

Yang promised to give the company a sharper focus and to re-evaluate how money was being spent.

Yahoo pitched a completely revamped Mail and mobile phone service at the Consumer Electronics Show in January.

Yang said that the services marked a new effort by Yahoo to reclaim its status as a starting point from which users begin each online session.