After firing about 1,000 people at the beginning of the year due to losses in profits, it seems Yahoo! is forced to resort to the same cost-cutting measures again. This time, however, the scale of it is even more draconian, as Yahoo is expected to lay off about 10% of its 15,200 strong workforce. Over the next few months, roughly 1,500 people are going to lose their jobs. Yahoo says that cuts will affect all parts of the company, but that they will not be uniform, as specific measures to make the company more efficient include outsourcing more work overseas and flattening the management structure.

In the wake of the economic recession, the consumer advertising is taking a pretty serious hit, and Yahoo is feeling it. The company’s earnings, measuring at $54.3 million (4 cents a share) fell 64% from last year’s $151.3 million (11 cents a share). Revenue did rise but only by 1%, and it is now up to $1.79 billion.

Of course, cutting costs isn’t the only way that Yahoo! is planning to increase profits by. The company is experimenting with ‘Apt’, a new system to let advertisers deal with display ads, a customizable Yahoo.com home page (much like the iGoogle page) which is part of the Yahoo Open Strategy. This is apparently working as ads are sold out October through December.

Yahoo is also doing something it should have done a long time ago, following in Google’s footsteps through large-scale employment of text search ads, something which Yahoo has neglected to do in the past, and which constitutes the majority of rival Google’s revenue.

Speaking of Google, it ironically seems that they may be Yahoo’s final hope, as a lot is riding on Yahoo and Google’s controversial ad deal which, if it passes the Caudine Forks of antitrust regulators, will mean an infusion of $800 million worth of much-needed capital for the Santa Clara, CA based company.

The outlook is less than pleasant however, and if a corporation as large as Yahoo! is forced to resort to this sort of drastic cost-cutting measures, the hopes of it recovering are questionable in the very least. Perhaps Yahoo! would have been better off accepting Microsoft’s acquisition offer back in February, which when made public, drove Yahoo’s stock from $19.18 to $29.

In light of this, one can imagine why Google would want to support their competitor. If Microsoft, which Google CEO Eric Schmidt sees as the company’s arch-nemesis, were to gain control of the only other large name in online advertising, the result would be a clash of the titans that Google would do best to avoid, for their own sake, as well as for the sake of market balance.