In a statement, Lycos Europe said it intended to retain a staff of slightly less than 1,000 in the 14 countries in which it operates.
In addition to reducing staff numbers, Lycos Europe said it would reduce costs by focusing on search, communication, e-commerce and key content channels.
The company is also hoping to cut costs by efficiently integrating the acquired companies MultiMania and Spray Ventures into its operations.
Lycos Europe said it would aim to exploit new revenue opportunities by reducing its dependency on advertising. Premium services, mobile services and e-commerce ventures are also being viewed as a potential source of revenue.