It is definitely a bummer of a day at AOL today, for those employees getting the boot.

Last night, BoomTown broke the news that the layoffs were coming today in both the U.S. and India.

Sources said those being laid off on the AOL staff in the U.S. will be getting four weeks of severance plus one week for each year of service.

It will be paid out every two weeks, instead of a lump sum.

In a memo, AOL said “impacted employees will be notified by 3 PM EST today and we will be scheduling an all-employee call at 5pm EST to answer any questions you may have.”

After all the bad news today, sources at AOL said there will be a series of more forward-leaning announcements about changes to AOL’s editorial offerings, now run by the Huffington Post’s Arianna Huffington.

AOL is making a lot of these drastic changes as its CEO Tim Armstrong seeks to turnaround the long-suffering Internet giant.

Finally, here the actual layoff memo, although I am not sure exactly what a “hyper-local, national and global media company” is:

From: Armstrong, Tim
Sent: Thursday, March 10, 2011 07:16 AM
To: Armstrong, Tim
Subject: AOL’s Next Step

AOLers -

Today is the next critical step on the comeback trail for AOL. We are creating a next generation hyper-local, national and global media company, and every action we’ve taken since AOL became an independent company has taken us further down that path. Our strategy remains clear: create high quality content experiences for consumers, at scale. As the digital landscape quickly evolves, so must our business, and we must continue to transform our organizational structure to one that works for today’s Internet.

Today, we are announcing an organizational structure that will significantly improve AOL’s ability to focus on growth. The structure will also impact areas of our team–making the decision to reduce staff levels is a necessary part of rebalancing our workforce to be competitive in our industry. Affected employees will be notified today and AOL will offer assistance programs–including workspace, counseling, and technology. We ask all of our employees to help impacted employees find career opportunities within our industry.

The structural changes at AOL are possible because of the progress we have made as a team in the last 12 months. The majority of our sites have materially improved their consumer experiences, our advertising business continues to get healthier and more innovative, our video position is strengthening everyday, our local footprint is quickly expanding, we are attracting some of the most talented people in the world to work at AOL, and our technology infrastructure is simpler and more robust. AOL is a global brand and a global opportunity and we are doing the hard work that will once again make the company an industry leader.

There are three important aspects to the structural changes we are making today. The first is the architecture of our brand portfolio. The second is the organizational design of The Huffington Post Media Group. The third is our shift from India being a business process center to India being a consumer products group focused on the APAC market.

New Structure: Investing in our Brand Portfolio

AOL’s brand portfolio has become more focused and stronger over the last year and we will continue to invest in our brands. We are committed to an AOL brand architecture that empowers us to build best-in-class brands that serve valuable audiences with incredible content and great experiences. As you have seen and have access to, AOL’s brands are measured with a consistent set of criteria that will allow us to transparently judge the health of each brand. As we considered adding The Huffington Post, we looked at the combined assets of the two companies and have found creative ways to strengthen our portfolio and will continue the brand refinement process over time. AOL will have four areas of significant brands: Media (Media & Ads–including Local), Publisher Networks (Media & Ads for Publishers), Applications (Communications, Mobile, Commerce), and Subscriptions (Paid Subscribers).

We have a clear path to brand success–which is only turbo-charged with the addition of the Huffington Post to our brand portfolio. We have an AOL brand that enjoys 99% brand awareness and our commitment to reinvigorating the AOL Brand has enabled us to begin to shift brand perception of AOL–including being named as one of the top 50 brands “loved” by consumers at the end of 2010. We will continue to invest in the AOL Brand as well as support best-in-class brands that will allow us to grow our overall audience and reflect our focus on the most valuable audiences–our 80, 80, 80 strategy.

New Structure: Huffington Post Media Group

The addition of the Huffington Post will be a core foundational element in our drive to be a leading digital media and brand advertising company. HuffPost attracts over 27 million people a month–its unique visitors have increased 588% over the last three years, and revenue has increased 400%. The company is leading the way in connecting content with social communities. AOL will be replacing approximately $20 million of loss in our news and finance operation with a high growth company and a team that is pioneering the way the world gets information.

The newly formed Huffington Post Media Group (HPMG) is a vehicle to house and grow our investments in journalism and content in general. The goal of HPMG will be to create compelling, content-driven experiences for users. Consumers, world-class brands, relevant audiences, and innovative brand advertising opportunities are a winning formula for the future of the web and HPMG will have significant resources and distribution to be a leader in our space.

With Arianna’s leadership and vision, HPMG will be fueled by high-quality editorial content, and will give AOL the enhanced ability to deliver a scaled and differentiated array of premium news, analysis, entertainment, information, and community – all integrating our local, national and global content initiatives. As President and Editor-in-Chief, Arianna will lead the content vision. Jon Brod, as HPMG Chief Operating Officer, will be Arianna’s business partner and lead the business strategy for HPMG. We will replicate this model through the vertical content areas and become an editorial-led media organization that allows us to create higher quality content in real time, while better aligning the editorial and business sides of our company.

We are creating Department Editor positions for each of the editorial departments and their partners will be the General Managers (formerly our Mayors), who will continue to serve as CEOs, driving revenue, distribution and overall growth strategy for the departments they support. We will be expanding the advertising programs (like Project Devil) and the distribution opportunities (like mobile and video) through the work of the GMs. GMs will also work to connect the content brands with our central sales force.

The editorial-driven model of The Huffington Post Media Group will also change the way we create our content. Going forward, AOL will invest more heavily in our in-house editorial team and transition away from a reliance on freelance journalists. Journalists are the heart and soul of a media company, and our reporters and editors will be working closely with the tech group to produce compelling and engaging editorial content–including lots of video.

As part of this enhanced focus on quality journalism, we will be making new editorial hires in the HPMG as well as continuing to expand and grow Patch. With the acquisition of The Huffington Post and this renewed focus on editorial creation, we have increased the number of staff dedicated to content creation to over 1200 people and remain a net importer of journalists.

As a result of this new structure, close to 200 people will be leaving the AOL Media and tech groups in the US. These changes, among others, will be necessary as we execute our Media Group’s vision of creating real-time engagement and continuing to build a comprehensive source of compelling news, entertainment, information, opinion, and community. Specific elements of this integration are still being finalized, and we will communicate them to you as soon as we know more.

New Structure: Refocus in India

India is an important consumer and business market for AOL and we have a talented workforce covering many aspects of our business. As Kumar has announced to AOL India, as part of the new organizational structure, we have decided to focus our efforts on the India consumer market and move the business processing functions to scaled partners. India is gaining importance as a consumer market and we are actively working on products for that market and will be ramping up research and product engineering after the restructuring. A small number of project engineering functions will transition to Dulles and Dublin, while India starts to focus on Asia and India related consumer products and revenue.

Back office and support functions will transition to 3rd party partners and many current AOL India employees will transition along with those roles to continue to support core AOL functions with new partner companies. For our business and our scale, it makes business and financial sense to partner with other providers.

Overall, the structural changes in India will impact close to 700 jobs, with approximately 400 transitioning out of the company, and 300 transitioning to outsourcing partners to continue to work on the AOL business. AOL India has been a significant part of AOL, starting with call center outsourcing in 2002 and morphing into a business operations center. The employees of AOL India are talented, energetic, and hard-working – and we will be offering impacted people transition services. I would hope that India becomes a great future consumer market for AOL based on India-first product development.

Today is a day that represents a step toward the future, but also a day where change will cause an impact across our team. AOL remains in the middle of the disruption that the Internet is causing and we are starting to move from being a disrupted brand to a brand that is leading the disruption. The changes we are making are not easy, but they are the right changes for the long-term health of the company, the brand, and for our employees.

Impacted employees will be notified by 3 PM EST today and we will be scheduling an all-employee call at 5pm EST to answer any questions you may have. Please do not hesitate to reach out to me directly -TA

Along with several hundred layoffs taking place in the U.S. tomorrow, which BoomTown reported earlier, AOL is also drastically cutting staff at its Indian unit right now, sources said.

According to sources, AOL India will lay off 400 employees in Bangalore, as well as transition 300 more to contractors working for partners.

That leaves about 200 staffers there, who will work on consumer-facing products for the Indian and Asian markets.

The New York-based Internet giant is also laying off several hundred people starting tomorrow in very targeted areas of the company’s U.S. operations, in a move that its CEO Tim Armstrong signaled last week was coming.

Sources said there will be no employees let go in its network group or advertising sales unit, but editorial and other media product groups will be impacted.

Despite the pain for AOL employees, the long-rumored layoffs are much smaller in number than the last one AOL did, in which 2,300 people lost their jobs. Before the layoffs this week, the company had a little more than 5,000 employees now.

The drastic cost-cutting comes right after the purchase of the Huffington Post, which AOL bought for $315 million. The acquisition of the news and opinion site closed on Monday.

The AOL layoffs are finally here, and they are smaller than some had been expecting.

According to several people close to the situation, the New York-based Internet giant will lay off up to several hundred staffers starting tomorrow in very targeted areas of the company’s U.S. operations, in a move that its CEO Tim Armstrong signaled last week was coming.

Sources said there will be no staffers let go in its network group or advertising sales unit, but editorial and other media product groups will be impacted. Also on the chopping block are jobs in India, which will mean many more hundreds of job cuts in addition.

The layoffs are much smaller in number than the last one AOL did, in which 2,300 people lost their jobs. The company has a little more than 5,000 employees now.

Among those leaving are Jonathan Dube, AOL’s SVP of News, sources said, who only arrived at AOL in November from his previous position as VP of ABCNews.com.

The entire content side of AOL is taking the brunt of the layoffs, due to overlap with the Huffington Post, which AOL bought for $315 million. The acquisition of the news and opinion site closed on Monday.

As part of the deal, Co-founder Arianna Huffington will be leading content efforts for the entire company.

Sources said she is likely to be making some dramatic changes, likely to be announced soon, to the way editorial products are created and presented to consumers.

There’s no question it’s a jarring contrast–layoffs versus champagne and cookies.

But that’s the reality at AOL as its acquisition of the Huffington Post closes this week, even as it sheds employees as part of its ongoing turnaround effort.

Sources said the New York-based Internet portal could announce layoffs as early as today.

[UPDATE: Layoffs will not come until after the Huffington Post deal is closed said other sources, although they are coming.]

AOL CEO Tim Armstrong indicated job cuts were definitely coming at a paidContent conference in New York yesterday.

“There will be job changes,” he said, when asked about layoffs.

Perhaps sooner than later.

BoomTown received several emails from worried AOL employees, noting that human resources staffers were taking steps to initiate the layoffs at 10 am ET/7 am PT this morning and that there would also be employee meetings then too.

I followed up with several sources close to the situation, who confirmed that the layoffs are imminent. Nonetheless, they could not specify the timing, size and scope of them.

[UPDATE: There will be an all-hands meeting for AOL staff with Armstrong, as well as new content head Arianna Huffington.]

The last time AOL laid off employees a year ago, it was a large action with job cuts of 2,300.

The latest slashing comes just as AOL management will try to aggressively tout the closing of its $315 million purchase of the Huffington Post.

The integration of the well-known news and opinion site will mean a significant change for AOL’s editorial efforts, as well as an opportunity to impress advertisers.

Thus, AOL is prepping boxes with Greek cookies and pricey champagne to send out to key advertising clients, to celebrate the deal’s close.

Why Greek cookies? Because it’s the original country of Huffington, co-founder and editor-in-chief of the Huffington Post.

I have emails into AOL for a comment.

BoomTown was looking over Victoria Harbour in Hong Kong as I blogged the conference call after Yahoo released its fourth-quarter earnings after markets closed today.

It’s pretty! But Yahoo’s revenue growth–still, not so much.

Let’s begin:

2:02 pm PT: Yahoo turned in earnings that were slightly better than expected, although no big shakes either, so the call was likely to sound exactly like the last several quarterly calls.

Bingo! We’re trying! It’s encouraging! You’ll see!

In fact, “encouraging” was just the word that CEO Carol Bartz used as she tried to focus on a doubling of operating income, operating margin and earnings per share.

Impressive, the revenue at Yahoo is still stubbornly not moving, which the company continued to attribute to the new search and online advertising partnership with Microsoft.

“This is all part of our plan to turn Yahoo around,” said Bartz, who added a new buzzword, “personalized content,” to its offerings.

She turned the call over to Yahoo CFO Tim Morse, who ran through the numbers, which pretty much came down to this: Display advertising up 16 percent from last year, while search revenue dropped 18 percent.

As in previous quarters, Morse talked about how “headwinds” will soon lessen and it will be smooth sailing for Yahoo ahead.

After the stormy seas of recent years, that would be nice, since investors have gotten pretty seasick owning Yahoo shares.

Morse offered that, “while there is still much to do, we are still executing well against our plan” and went on about how good things are.

Finally, we have a “unified purpose,” which he characterized as personalized content too.

It’s a nice new catchword for Yahoo, and I liked Morse’s strong tone and gumption, which for an accountant was like hollering.

His big Achilles’ heel: The revenues projections ahead remain soft.

2:24 pm: Back to Bartz, who focused on the future success of the Microsoft advertising alliance and also Yahoo’s leadership in display advertising.

She listed some big offline brands, such as Wal-Mart and Macy’s, noting when looking for online ads, “That’s right, they all came to Yahoo.”

Bartz moved on to its stake in China’s Alibaba Group and noted it was a “great investment with a bright future.” Translation: We are not selling for now.

But noting its investment in Yahoo! Japan, Bartz had a slightly different take, mentioning talks to “unlock” the value of the stake. Translation: Maybe we’ll sell if we can figure out how not to pay all those taxes.

Bartz did the same with all of Yahoo properties, putting a sunny spin on what is still a turnaround situation.

It’s a good strategy, but it is one that is starting to sound like a broken record, especially when Google, Facebook and others seem to be like a house on fire.

2:35 pm: Now on to Q&A, in which Wall Street analysts ask softball questions of executives.

And so they do, asking queries that include small details about its operating margin, questions on tiny changes in numbers due to accounting changes. And very little about larger strategy.

You can read about this stuff in the press release, but whatever.

I am thinking of starting an investment bank, so I can jump in on these calls and ask some questions that have actual substance.

The United Bank of Swisher? Goldman Sucks?

Ooh, I was wrong, because one analyst asked a good one about possible future layoffs.

Bartz noted the company would be adding people, um, after laying some employees off.

It’s all about “re-allocating” staff, which Yahoo did earlier today by laying off one percent of its workforce, after an earlier four-percent cut.

Next, a question about search share, with Morse noting there will be search volume growth in the future.

Big message: We are in this to grow the share.

Except it has not been growing, as the last several months of surveys of search share have shown.

But Bartz firmly declared: “We’ll be up” in 2011.

A question focused in on mobile, and Bartz pointed out that Yahoo had the disadvantage of not having a mobile operating system such as Google does with Android.

Good point!

2:59 pm: Another terrific analyst comment about the disconnect between the execs encouraging comments and the actual financials, which show a downturn in, yes, revenue.

It is exactly the point here, which Yahoo has been trying to spin. Morse went through the list of excuses, from bumpiness of the search transition to weakness in affiliate sales to whatever.

Bartz jumped in and blamed the search alliance again, noting that moving advertisers over to the new platform was hard to do.

“I will not back down on the fact that we are gaining momentum,” said Bartz about search. “There is a lot going on here.”

Morse chimed in, noting he was the one using “gaining momentum” in his script. “I really believe that,” he said, going through the terrific plans.

“You’re correct the top line is not showing that yet,” said Morse in an increasingly loud voice. “There’s an awful lot there to be optimistic about.”

The accountant that roared.

Encouraging.

But then came the last question about the growth of Facebook, the Silicon Valley social networking phenom that is clearly going to be Yahoo’s biggest rival over the next years.

Bartz acknowledged Facebook’s explosive growth, but declared the company more compatible than competitive.

“There’s room for everybody here,” she said.

Presumably, that’s the hope for Yahoo.

(Also, you can see a slide deck of the financials here.)

Yahoo, which will announce fourth-quarter earnings later today, is also laying off another one percent of its staff, according to sources.

The layoffs of well over 100 employees are taking place across the company, although cuts are largely in the media and advertising group.

Yahoo currently has about 13,600 staffers worldwide.

After initially declining comment, a Yahoo spokeswoman confirmed the move and released the following statement:

“The personnel changes we are making are part of our ongoing strategy to best position Yahoo! for revenue growth and margin expansion and to support our strategy to deliver differentiated products and experiences to the marketplace. We’ll continue to hire on a global basis to support our key priorities.

Today’s action impacts approximately 1% of the global employee base.”

The Silicon Valley Internet giant conducted a larger layoff of four percent of its staff–mostly in its product organization–in December.

For a while recently, it looked like Yahoo shares might start pulling out of their longtime $16 range, boosted by various and sundry rumors about the sale of its Asian assets and other machinations.

But, as worries about its next earnings call in less than a week coalesce, the Internet giant’s stock has settled right around its 50-day moving average of $16.59, closing down 1.85 percent at $16.50 yesterday.

That’s not bad given the stock has a 52-week low of $12.94 (and a 52-week high of $19.12).

But, it did not stop Morgan Stanley from downgrading Yahoo shares on Monday and cutting its revenue and earnings estimates.

The reason? “Deteriorating fundamentals” and a belief that “users will increasingly consume media/content on Facebook vs. Yahoo!”

You think? (As Yahoo has found, it appears that the kids love to social network!)

Thus, despite a healthy valuation for those Asian assets in the Alibaba Group and Yahoo! Japan and some speculation about the sale of them–the lack of any revenue growth in Yahoo’s core U.S. market is still the big drag on the Silicon Valley icon.

Because of that, there has also been increased short seller activity recently, which means all eyes will be on Yahoo’s fourth-quarter earnings release next Tuesday, Jan. 25.

Currently, Wall Street analysts expect higher earnings of 22 cents a share on revenue of $1.19 billion for Yahoo.

That revenue number is lower than a year ago, due to a weakening display advertising business and declines in search ad revenue at the company.

And it will not help if Google, as expected tomorrow, turns in a blow-out quarter, especially if it shows strength in its own display business.

So, after its continued lackluster revenue in the last quarter, top executive turnover in its media business and layoffs in December, investors are going to be expecting some long-promised sign of turnaround from Yahoo CEO Carol Bartz.

Whether she can finally start to deliver on that or not next week remains to be seen.

Yahoo confirmed the move by Zinman (pictured here), after an inquiry by BoomTown, in a statement:

“David Zinman, Vice President & GM, Display Marketplace at Yahoo! has decided to leave the company, effective January 11. He’ll be working very closely with James Beriker, the former CEO of Dapper, who will take on David’s position, to ensure a smooth transition and build upon Yahoo!’s leadership position in display advertising.”

A source close to the company said the move was not part of a reorganization about to take place of the critical U.S. advertising unit by its new leader, Americas EVP Ross Levinsohn.

Levinsohn, who came to Yahoo in late fall, is now prepping a rejiggering of this management team, much as Chief Product Officer Blake Irving did soon after he arrived last April.

Unlike Irving’s, which included a number of significant exec departures, Levinsohn’s new structure is not expected to be as drastic, nor will it involve the massive layoffs that took place in the product unit in December.

Levinsohn, according to numerous sources inside the Silicon Valley company, seems to be off to a good start there, with many considering the fast-talking exec a “breath of fresh air.”

Or, perhaps, breath of hair.

Apropos of nothing, pretty much everyone I spoke to about his performance thus far comments on his very bouncy and behaving mane.

They are lovely locks, as I can attest, and as you can see here.

So, let’s hope Levinsohn can grow Yahoo’s stagnant revenue as well as he does his tresses.

A LinkedIn spokeswoman confirmed the move after an inquiry by BoomTown and said Arnold would be director of engineering, working on monetization products at the fast-growing business networking site.

I am still waiting to hear from Yahoo about the departure, but sources said the announcement about Arnold was going out today.

Arnold seems to have survived the recent spate of layoffs at the Silicon Valley Internet giant, so I am chalking this one up to another drip in the continued talent drain at the Yahoo.

That number could be as much as 50 percent of the 1,100 employees at Myspace, largely based in the U.S., but also in international locations.

While the decision of what cuts to make to its employee base have not been made yet, nearly the entire Myspace staff was given the last week of December off from work to save money. Update: Myspace tells us via email the week off was an employee perk, not a cost-cutting measure.

Sources stressed that management was still working out the details of more drastic cost-cutting measures that owner News Corp. has been wanting from Myspace, as its revenues and traffic have declined.

The layoffs are also part of a larger rethink about the future of the Beverly Hills, Calif.-based company, which has had many difficulties in recent years, including several leadership upheavals and a talent drain, as well as stagnant growth.

Among the many options contemplated has been the sale of the Myspace unit, as has been widely reported. According to sources, Jack Kennedy, EVP of operations for News Corp. Digital Media, has been tapped to explore the sale of Myspace.

Until now, both large-scale cost-cutting and exploration of an acquisition were on hold as Myspace launched its redesign as an entertainment hub, which was rolled out about six weeks ago.

Myspace also recently started user account integration with former foe Facebook.

And the company also revamped its mobile offerings and signed a new search advertising deal with Google (at which time MediaMemo’s Peter Kafka predicted layoffs were around the corner).

But, according to many inside and outside the company, the redesign and strategy moves are not expected to result in a major turnaround of Myspace. Meanwhile, the piles of money the company once got from its Google relationship have also gotten much smaller. It’s not much of a surprise that News Corp. is moving to remedy the situation now.

In fact, during News Corp.’s earnings call in November, COO Chase Carey called attention to Myspace’s ever-weakening performance and said “current losses are not acceptable or sustainable.”

He added: “We judge in quarters, not in years.”

At this point, a sale would be the likeliest save for the media giant.

One juicy rumor that has been going around suggests Facebook game-maker Zynga as a potential acquirer of Myspace. While the two companies had discussed closer ties in the past–back when Zynga COO Owen Van Natta was still CEO of Myspace–those talks went nowhere.

Several sources said a private equity buyer for Myspace is now the likeliest outcome if the online property is sold.

Myspace declined to comment on layoffs or acquisition talks.

(Full disclosure: News Corp. also owns Dow Jones, which owns this site.)

To say BoomTown is not a person who likes to hear when I arrive at a vacation spot, “Have a magical day,” is an understatement.

In fact, if I were a Disney character, I would be an unholy mash-up of Cruella de Vil, Grumpy and Scrooge McDuck.

Yet, here I am for the rest of the week–after just barely escaping snow prison in New York–at Disney World in Florida, with the wife and kids and a lot of preternaturally peppy folks from all over the world.

In other words, it’s a small world after all, instead of just a smaller Yahoo via layoffs and exec departures. Or, Pirates of the Caribbean and not Pirates of Silicon Valley.

You get the idea.

(Although since Walt Mossberg and I will be interviewing Disney CEO Robert Iger at D: All Things Digital, our ninth conference in June of next year, it’s kind of work-related.)

In any case, I won’t be posting much–except for putting up the last of the D: Dive Into Mobile full videos–until a week from now.

But, all week, All Things Digital writers will be weighing in on the year past and the one ahead, starting with MediaMemo’s Peter Kafka later today.

When I return, I’ll be setting the stage for the upcoming Consumer Electronics Show in Las Vegas (my kind of theme park!), where we will be putting on an afternoon of interviews with big names in tech for D@CES.

After that, it’s right into the expected move of Apple iPhone to Verizon and more, since the tech parade–just like the Electrical Parade on Main Street in the Magic Kingdom–never seems to stop.

So, until 2011, have a magical day. And I mean that in the Cruella-ist way.

That’s because, here’s a video of Disney World 3D in Google Earth that is already causing me to freak out:

Earlier today, TechCrunch Senior Editor Sarah Lacy and I went on Michael Krasny’s Forum show on San Francisco’s KQED public radio station to talk about the Yahoo layoffs earlier this week.

Despite the depressing topic, it was a lively session, which covered a range of issues about the Silicon Valley Internet giant, from its weak morale to the rocky performance of CEO Carol Bartz to the please-fire-yourselves-now board of directors.

During the talk, Lacy declared herself queen, so I dubbed myself a duchess. Thus, we are blog site royalty, which I compared to being the rulers of Latvia.

Sorry, Latvia!

Here’s the show for your listening pleasure (or displeasure, if you are on the how-can-we-miss-you-if-you-won’t-go-away Yahoo board):

It’s Yahoo, it’s BoomTown and so it’s an internal email memo from CEO Carol Bartz to staff about the employee layoffs at the Silicon Valley Internet giant yesterday.

Here it is:

Yahoos,

I want to share some tough news with you. Today, we began notifying some Yahoos that they will lose their jobs. Most of the reductions will come from the Products org and, when completed, will affect about 4% of the company.

I know this has been rumored for some time. It’s disappointing when things like this leak, and it certainly doesn’t make it any easier for anyone involved. This was a tough call, but a necessary one. We need to make these changes now to ensure that Products is structured and running the way we want as 2011 begins. And that means we need fewer Yahoos in some areas, and different types of Yahoos in others.

There are several reasons for this. First, we’ve found a lot of duplication in work between Products and the regions. Second, it’s no secret that we’re cutting investment in underperforming and non-core products so we can focus on our strengths (like email, the homepage, search, mobile, advertising, content and more). And lastly, we need to get the Products cost-structure in order so it aligns with our development plans for next year and beyond.

You’ve heard me say before that I didn’t come to cut Yahoo! to greatness. That’s still true. This decision is about more than cost savings. The changes are meant to get us into a position so we can invest more in the kind of products and technology we know we need to be successful. The process that begins today–along with Blake’s past org changes and new Products operational plan–helps to get us there.

It’s never easy to say goodbye to Yahoos we know and work with, especially before the holidays. Please know that we’re helping those affected with severance pay and benefits, plus services to help them find other jobs.

One last thing before I go: It’s important to put this in perspective, and remember that we’re making good progress on our turnaround. Margins have expanded. Revenue growth has stabilized after a long period of decelerating trends. Product rollouts are accelerating as we modernize our infrastructure. Our Search alliance with Microsoft continues on schedule, and more.

We’ve got a lot of potential, but there is still a lot of work to be done. Let’s stay focused and not lose sight of that.

Carol

It matters a great deal to the unfortunate employees at Yahoo who are being laid off this week for the reporting on the subject to be accurate and to entail some serious effort.

(It’s bad enough to lose a well-paying job in this still-tough economy, but to lose one over the holidays requires quite a lot more than incorrectly quoting a tweet off Twitter without checking first.)

And so here’s the deal, as BoomTown has previously reported, about what’s happening with Yahoo layoffs, set for tomorrow morning:

Yahoo will lay off about 650 to 700 employees.

Those layoffs will come largely from its product division, headed by Blake Irving, although there could be firings in other parts of Yahoo.

The layoffs are mostly in the U.S. units of Yahoo.

Those let go will be notified tomorrow and will likely have to leave Yahoo facilities immediately. Company sources said the action will be completed by early afternoon, Pacific time.

It’s definitely bad timing for Yahoo, given it is less than two weeks until Christmas, but cost-cutting at the company seems unavoidable as it seeks to improve revenue and spur growth.

Still, it is another sad day in Sunnyvale, Calif., where the iconic Internet giant is headquartered.

Not for much longer, it seems. The company is also closing its online music store at the end of the year. And I’m told that it has essentially abandoned efforts to launch a new, legal music service that it had spent much of the past year building.

A sign on the Web retailer’s homepage tells customers that it’s no longer accepting new payments, and the company has told vendors via email that the store will shutter on Dec. 31. (You can see a copy of the note at the bottom of this post.)

LimeWire hasn’t responded to my request for comment. And it’s not clear why the company is closing up the shop, because in this case, LimeWire shouldn’t be dealing with any legal issues. LimeWire operated the store the same way that Apple’s iTunes does–it took product that music labels (not the big ones, but small independents) wanted to sell and delivered it to customers.

Meanwhile, people familiar with the company tell me that it has also stopped pursuing plans to launch a new, legal music service that had been building throughout 2010.

As recently as October, the company had been talking up the prospects of the new service, and had invited me to see a preview of it even after the court ruling that shuttered its illegal file-sharing service. But LimeWire later rescinded the invitation, and said that its lawyers had advised it not to discuss the new service.

My hunch is that LimeWire is stripping down all of its remaining assets in advance of January court proceedings. Those are going to determine how much the company owes the major music labels that successfully sued it for copyright violations.

LimeWire had already laid off at least 30 percent of its workforce following the October court ruling.