There was a time when Yahoo! was on top of the world. Then along came a startup called Google, and things started to slide. Apparently, the slide has finally reached the forest, and the company is resorting to the axe to bring things under control.

Analysts have been reporting for quite some time that Yahoo is in trouble, and have advised large scale cuts to the company's workforce as an important part of any rebound strategy. According to reports — beginning with the Silicon Valley Insider over the weekend — Yahoo has finally decided to send out pink slips, with estimates running as high as 2,500 — almost 20% of the company's employees. Yahoo spokespeople are refusing to comment on the reports, but inside sources have reported that cuts are certainly on the table, though they will likely be in the hundreds, rather than thousands. The cuts are apparently ready to go, but could be pulled if the company sees an upsurge in stock price.

Reports are indicating that any cuts would be to departments outside the company's three "Big Bets" — use of yahoo.com as a starting point, opening sites to outside development, and beefing up advertising positions.

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