Struggling US Internet pioneer Yahoo! said Wednesday it would slash some 2,000 jobs in a purge aimed at transforming into a "smaller, nimbler, more profitable" company.

Yahoo! chief executive Scott Thompson, who took the helm in January promising to turn the company around after a year of falling income, said the job cuts were a "tough decision" to achieve that goal.

"We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities," Thompson said in a statement.

"Our goal is to get back to our core purpose -- putting our users and advertisers first -- and we are moving aggressively to achieve that goal," he continued.

The restructuring will center on "select" groups and the platforms that support them.

A key focus will be data that drives "deep" personalization for users and return on investment for advertisers.

"Today's actions are an important next step toward a bold, new Yahoo! -- smaller, nimbler, more profitable and better equipped to innovate as fast as our customers and our industry require," Thompson said.

Yahoo! has been trying to re-invent itself as a "premier digital media"

company since the once-flowering Internet search service found itself withering in Google's shadow.

As the company has strived for a new identity it has seen an exodus of talent that commenced during a failed bid by technology giant Microsoft to buy Yahoo! four years ago for about $45 billion.

"They have been bleeding talent for a while," said independent Silicon Valley analyst Rob Enderle.

"At some point, all of the smart people leave because otherwise you are just waiting around to be shot," he continued. "There are places like Google and Facebook they can go work for."

While Thompson did not share details on the company's "core values" that are now in focus, they appeared to involve publishing online content tailored to tastes of website visitors.

"The rhetoric around the layoffs indicates he is taking Yahoo! down to a publishing core as a supersite," Enderle said.

"The super-portal things are very dot-com, and that didn't work out very well," he continued with a reference to the legendary boom and bust that took place in the Internet industry more than a decade ago.

Add into the mix that Yahoo! recently announced it would launch a tool allowing users to signal that they do not want their online activities tracked, which is a key component of effectively targeting lucrative ads.

The Internet firm's share of US online ad revenues sank to 9.5 percent last year from 15.7 percent in 2009 and will drop further this year, according to eMarketer.

Social networking giant Facebook is becoming the preferred venue for display advertising key to Yahoo! revenue while Google's dominance in search advertising strengthens, eMarketer indicated.

Yahoo! relies on Microsoft's Bing search engine to handle queries at its websites, customizing results for users.

The 17-year-old company based in Sunnyvale, California, had more than 14,000 employees at the end of 2011.

A Yahoo! spokeswoman told AFP the 14 percent workforce reduction was "not across the board" but that "most units have been impacted." She would not disclose further details.

The shakeup was expected to rattle a products division that has failed to crank out hit innovations.

Yahoo! expected $375 million in annualized savings from the job cuts.

"The company will be disciplined in its investments and radically simplify how it builds, launches and maintains many of its properties and products," it said.

Yahoo! is also trying to cash in with a US lawsuit accusing Facebook of infringing on 10 of its patents.

That tactic ran into headwind on Tuesday when Facebook fired back at Yahoo!

with a countersuit charging that the faded Internet star is violating the social network's patents -- and not the other way around.

Yahoo! stock price had slipped slightly to $15.12 near the close of trading in an overall declining market.

Thompson, formerly head of mobile payments firm PayPal, became chief executive after months of turmoil at Yahoo!, including deadlocked talks over possibly selling off the company's valuable assets in China and Japan.

Two weeks after Thompson was recruited, Yahoo! co-founder and former chief executive Jerry Yang resigned from the board of directors.

A few weeks later the chairman and three other directors said they would step down, opening the way for Thompson's agenda. (AFP)