Yahoo! is preparing to lay off 1,500 employees — a tenth of its total workforce — following news that the struggling Internet icon’s revenues slumped again in its most recent fiscal quarter. It’s the second time in nine months that the company has resorted to massive staff cuts to trim operating costs.

The layoffs are part of a plan to reduce the company’s annual (US)$3.9 billion expenditures by (US)$400 million. Other measures to be implemented over the next two months include outsourcing some jobs to less-extensive offshore workers and closing some of Yahoo’s U.S offices.

Yahoo’s financial difficulties date back over a year, during which time the company fought off an unwelcome takeover bid by Microsoft and courted Google in an unsuccessful merger bid.

Yahoo! fans — who feared, earlier this year, that their favourite search and e-mail provider might go down or be assimilated by another Internet superpower — remain cautiously optimistic about the future. Financial observers say the Yahoo! corporate downturn could last ‘well into next year’. But management remains positive that Yahoo! can weather the storm.

“I believe getting Yahoo! more fit at this time will provide the flexibility necessary for navigating current conditions and strengthen our position for the future,” Yahoo! CEO Jerry Yang told analysts in a conference call earlier this week.

We’ll all just have to wait and see…