Weakening advertising and the economic downturn are spurring Yahoo to cut at least 10 percent of its workforce by the end of the year, chief executive Jerry Yang announced during the company’s quarterly earnings call today. That adds up to around 1,500 job cuts, matching rumors earlier this week that the Sunnyvale, Calif, company planned to lay off more than 1,000 workers.

Yahoo property usage is up, Yang said during the earnings conference call, but monetization is weak, particularly in premium display advertising. Overall, Yahoo made $1.786 billion in revenues during the third quarter of 2008, up only 1 percent from the same period last year. Net income was $54 million, or 4 cents per share, a sharp drop from $151 million, or 11 cents per share, during Q3 last year.

Yahoo said it’s lowering its revenue expectations for the rest of the year — but not cash flow, because of the company’s cost-cutting measures. (“Cost-cutting,” “streamlining” and “efficiency” were among the most-repeated phrases during the call.) The economy probably won’t be kind to Yahoo in the coming months, but Yang said he remains optimistic, pointing to new features like user profiles, which will allow Yahoo to monitor and monetize its “social graph,” and the launch of the APT advertising platform, partnering first with the San Francisco Chronicle and the San Jose Mercury News.

On the Google-Yahoo ad deal, Yang didn’t offer any information that wasn’t available already — the tech companies have voluntarily delayed implementing the partnership as the U.S. Department of Justice finishes its anti-trust investigation.

Kara Swisher has posted a copy of Yang’s email to employees about the layoffs.