The 14,000 employees of Yahoo are bracing for thousands of layoffs that could begin as early as this week as the company's new chief executive finalises a major new strategy for the internet firm.
Scott Thompson has begun briefing his senior executives on his plans to slim down and refocus the company, whose fortunes have plunged since Google and Facebook have shaken up the business of the internet.
Yahoo poached Mr Thompson from the payment firm PayPal in January, having fired the previous chief executive, Carol Bartz, after she failed to find a way out of the company's strategic malaise.
Lay-offs are expected across the board, but reports over the weekend suggested that the marketing and product development groups could be hardest hit. Mr Thompson is believed to have decided to focus Yahoo on its existing online media and advertising businesses.
"There are pockets of greatness in Yahoo, and there are pockets of 'are you kidding me?'" said Shelly Palmer, technology consultant and founder of Advanced Media Ventures.
He added: "There is no silver bullet, and what can and can't happen depends a lot of cultural factors, as you would expect in any large organisation with a lot of history and a lot of fiefdoms and power struggles."
Silicon Valley gossip suggests Mr Thompson's meetings with senior executives have at times proved fractious. The industry blog AllThingsD reported that he is planning a rolling series of layoffs beginning this week and that he expects to announce Yahoo's new strategic direction before the middle of the month.
In January, announcing his first set of financial results, Mr Thompson said Yahoo had to make the most of the data it had on more than 700 million users around the world. "Those of you who know me understand I want to hear all the options," he said on a conference call with analysts.
"But when it comes to making decisions, I make them quickly and push to move fast, fast, fast."
Yahoo remains one of the largest search-engines, email and messenger services and, through Flickr, photo-sharing sites in the world, and it runs a networks of websites spanning news, sport, finance, horoscopes and much more.