SAN FRANCISCO — Yahoo Inc. said yesterday that it would lay off at least 10 percent of its workforce over the next few months as it grapples with the deepening economic crisis, continuing the Internet pioneer's tough run since it spurned a buyout offer from Microsoft Corp. earlier this year.

With the online advertising market feeling the burn of a drop in consumer spending and tightening credit, Yahoo delivered a lackluster third-quarter report and lowered its revenue forecast for the rest of the year. Executives said the company was taking steps to ride out a prolonged downturn.

About 1,500 employees will lose their jobs as part of Yahoo's plan to slash costs by $400 million from its annual expenses of $3.9 billion in the next few months.

Yahoo is based in Sunnyvale, Calif., and also has offices in such cities as Santa Monica, San Francisco and New York. It declined to say where the cuts would occur.

In addition to trimming staff, the company is looking for lasting ways to make the company run leaner such as consolidating offices, sending more work overseas and flattening its management structure, Yahoo Chief Executive Jerry Yang told analysts.

The company earned $54.3 million, or 4 cents a share, down 64 percent from $151.3 million, or 11 cents a share, a year ago. Revenue rose 1 percent to $1.79 billion. Excluding commissions paid to advertising partners, Yahoo's revenue was $1.32 billion, about $50 million below analyst estimates.

President Sue Decker said the company would continue to balance investing in new products with keeping a grip on costs. Yahoo hired consulting company Bain & Co. last month to evaluate expenses. "This is a top-to-bottom review," Decker said in an interview. "We are looking at everything."

This is the second time this year Yahoo has promised mass layoffs to reverse its sliding fortunes, which have dragged its stock price to a 5 1/2-year low.

Analysts say Yahoo seems more determined to cut costs than it did in February, when it jettisoned about 1,000 workers only to replace them — and more — within a few months. Yahoo has increased staff by 1,400 during the past two quarters to 15,200.

Yahoo's shares gained 5 percent to $12.70 in after-hours trading. They ended the regular session down 79 cents to $12.07.

Yahoo lowered its 2008 revenue estimate to a range of $7.18 billion and $7.38 billion, from its forecast issued three months ago of $7.35 billion and $7.85 billion.