Yahoo's first-quarter profits plummeted 78% compared with the same period last year, and the company plans to cut about 5% of its global workforce.

During an earnings conference Tuesday, Yahoo leaders announced that they would cut about 650 employees to eliminate redundancies and streamline the business. The affected employees will receive notices within the next two weeks, Yahoo said.

The company reported $117.6 million in net income during the first quarter, down 78% from $536.8 million last year. That translates to 8 cents a share, compared with 37 cents a share during same period in 2008. The company reported $1.58 million in revenue, down 13% compared to the first quarter of 2008.

The company said the declines were caused in part by currency fluctuations, the sale of Kelkoo, and lower fees from broadband partnerships, VoIP, and music subscriptions. Net revenue stood at $1.2 billion, up slightly from Yahoo's estimates of $1.1 billion. Ad sales dropped from $1.82 billion during the first quarter of 2008 to $1.58 billion in the first quarter of 2009.

Yahoo CFO Blake Jorgensen said the recession hurt all aspects of the business, but CEO Carol Bartz said Yahoo will be well-positioned when advertising growth resumes.

"While the economy will clearly remain a challenge for us, I believe our job is to focus on what we can control... and that is creating kick-a** experiences for our users," she said. "We will maniacally focus on our most important products."

Those products include the portal's news, finance, sports, and entertainment features, which Bartz said draw millions of users to Yahoo and make the company attractive to advertisers. Page views rose 8%, but click-through rates dropped, reflecting weakness in consumer demand.

Yahoo shares rose more than 5% to trade at $13.48 after hours.

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