Yahoo declined to comment.

The layoffs, which will not take place all at once, will mostly affect Yahoo's product, research and marketing groups, according to the report in the blog AllThingsD, which cited anonymous sources.

Under a plan still being finalized, Yahoo would reorganize its business to create a global media division, while product development would move to decentralized units. The company is figuring out the future of its advertising technology business, as well as its search business, according to the report.

The layoffs and reorganization would mark the most significant moves by new Chief Executive Scott Thompson, the former PayPal president who took the top job at Yahoo in January.

Yahoo, which ended 2011 with roughly 14,000 employees, has seen its revenue decline amid competition from Web rivals Google Inc and Facebook.

(Reporting By Alexei Oreskovic; Editing by Gerald E. McCormick)

• A Permanent Economic Emergency