Various reports are pointing to an inevitable move by Yahoo (NSDQ: YHOO) to cut a good number of jobs, as many as above thousand. This comes as the company is set to announce its Q3 earnings on Tuesday and the picture may not be pretty. Besides these layoffs, many other cost cutting measures will be announced, reports WSJ. Yahoo managers have been asked to cut operating budgets by 15 percent, and the company has recently let go of two to three dozen external recruiters, WSJ says, citing sources.

The company fired about 1,000 workers in January this year. The company had about 14,300 employees worldwide at the end of June. With the economy being in the shape it is, some of this is the usual belt tightening, but for Yahoo, the issues are more dire. With the fallen MSFT deal, the Google (NSDQ: GOOG) search deal stuck in regulatory issues, competitive pressure increasing from all sides, and major slowdown in display advertising online, Yahoo’s time is running out on multiple fronts.

The company hired management consultants Bain & Co earlier this year, and their suggestions could result in suggestions beyond layoffs, including recommending an AOL (NYSE: TWX) merger, WSJ says.