Yahoo thus missed Wall Street estimates for revenue and matched their profit expectation. The consensus estimate from analysts polled by Thomson Reuters was for pro-forma earnings per share of $0.09 and revenue -- minus commissions -- of $1.37 billion.

The fourth-quarter staff cuts will be this year's second wave of layoffs for Yahoo, which let go of 1,000 employees in February. Yahoo ended the third quarter 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 real estate, 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 $7.35 billion and $7.85 billion to a range of $7.17 billion to $7.37 billion.

Yahoo Co-Founder and CEO Jerry Yang tried to put a positive spin on the results during a conference call Tuesday, saying that Yahoo is "well positioned for future growth."