Yahoo (NSDQ: YHOO) may have been shedding employees for the greater part of the last year, but it’s also getting a bigger space. The company is moving ahead with a plan to construct a three million square foot campus in Santa Clara that will rival Google’s headquarters in size, Marketwatch reports; an environmental impact report is currently under review by the city. A Yahoo spokeswoman tells us that it’s all still in the “planning process and it is too early to discuss potential costs or specific usage of the property.” Yahoo purchased the 42 acres it wants to develop in July 2006 (when times certainly were better) and initially filed plans to redevelop the property last August. Approval is expected late next year at the earliest.

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Still, it’s a noteworthy development for a company that has cut more than 2,000 jobs over the last year, especially considering that the property could fit more than double the number of employees Yahoo houses at its current headquarters in Sunnyvale (pictured above). While Yahoo CEO Carol Bartz has said the company is done with its layoffs, Yahoo is still set to lose at least 400 employees to Microsoft (NSDQ: MSFT) if its search deal with the company gets the green light. And just yesterday, CFO Tim Morse talked at length to analysts about how the company would continue to work to cut costs, in part by increasing engineering productivity and improving its “internal plumbing.”