In a shocking turn of events, Yahoo Inc has decided to lay off 2,000 people or 14 percent of its workforce. The decision comes as a result of Yahoo not being able to keep up with competitiors Google and Facebook.

According to IBNLive,Yahoo, which ended 2011 with some 14,000 employees, said it would save $375 million annually from the cuts and incur a pre-tax cash charge in the second quarter of $125 million to $145 million.

"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.We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities," Yahoo CEO Scott Thompson was quoted as saying by Business Standard.

According to Bloomberg reports, Yahoo's revenue declined to $1.17 billion in the fourth quarter and they are short of the $184.2 million that analysts had projected.

Yahoo is expected to declare first quarter resutls on 17 April.