This week, Yahoo is expected to roll out a slew of cost-cutting measures, including layoffs of potentially more than 1,000 employees. Exact plans may be released tomorrow concurrently with what is expected to be a disappointing third quarter earnings report.

While talk of staff cuts has been in the air since 1,000 were let go in February, and reports of this second round have been circulating the blogosphere for weeks, the company is now confirming the rumor through major print outlets. The layoffs, foreshadowed by a major slowdown in hiring and the recent termination of several dozen outside recruiters, are anticipated to occur across all departments of the company, which had 14,300 employees as of June. Some managers have been asked to cut 15 percent from their current operating budgets, reports The Wall Street Journal.

While many smaller Silicon Valley companies have turned to staff cuts to weather the economic downturn, Yahoo is the first marquee name to follow suit. Since rejecting Microsoft’s $47.5 billion acquisition offer earlier this year, it’s been battling to make up for consistently low revenue and growth, and to keep pace with frontrunners Google, MySpace and Facebook.

Yahoo has contracted consulting firm Bain & Co. to aid in the restructuring effort, and is looking to partnerships for a potential life line, including AOL, and even a reengagement with Microsoft, according to The Journal. Until these talks move forward, however, the company has to hope that Google makes headway with the Department of Justice to push through their search advertising deal.

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