Yahoo is expected to tell 1,500 mainly US employees today they will be out of work by Christmas.
The internet search company announced the layoffs in October as part of a cost savings plan after releasing poor third-quarter results.
Since then, managers have been working to identify exactly which jobs would be cut to meet the £244m a year savings target.
Affected employees will accrue holiday credits, receive benefits and remain on call until mid February, but will stop work today, according to Silicon Alley Insider.
Yahoo has suffered a $30m loss in value since out-going chief executive Jerry Yang rejected a buyout offer from Microsoft in February.
"We believe that the moves we are making will help us exit 2008 stronger and more competitive," Yang said in October.
Strategy for turning the company around, however, will not be in Yang's hands. He is to step down as chief executive as soon as a successor is found.
Yang will remain a board member, but the top job will go to someone with proven experience in managing technology companies through difficult times.
Former Vodafone head Arun Sarin, who led the UK telecoms company through a period of rapid change, has been tipped as a possible successor.