Yahoo is expected to announce thousands of job cuts as part of cost cutting measures.
The news comes after Yahoo shed around 1,000 jobs at the beginning of the year to reduce costs.
Details of the latest job cuts could be made tomorrow when the internet firm reports earnings for the third quarter, according to The Wall Street Journal.
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The report said the exact number of job cuts is unclear, but other US media reports said insiders expect more than 3,000 jobs to be cut by the end of the year.
Analysts have said Yahoo is in its worst slump since the dotcom bubble burst in 2001, with shares falling to a five-year low of $11.37 last week.
Shares started the week at $12.90, which is below Microsoft's takeover offer of $33 in May.
In August, Jerry Yang, Yahoo chief executive, and Roy Bostock, chairman were criticised for the way they dealt with the Microsoft bid. Several investors slammed them for holding out for too high a price.
Google reported strong third quarter results last week, which could be good news for Yahoo's search advertising business.
Yahoo is hoping for a cash injection if the US government approves a search advertising deal to show ads sold by Google.
The deal has been delayed by a US Justice Department investigation into whether the deal will reduce competition in the online ad market.