The internet company's profits were down considerably due to an extraordinary paper gain made in the first quarter of 2008 from a revaluing of stake in Chinese web company Alibaba, which added $401m to Yahoo!'s profits.
Revenues for the first quarter decreased by 13% to $1.58bn.
Revenues were reduced by the effects of currency rate fluctuations, the sale of price comparison site and lower fees revenues from broadband partnerships, voice-over-IP services and subscription music offerings.
Excluding the impact of currency fluctuations, revenues for the first quarter of 2009 would have declined by 8% year on year.
Yahoo!'s proposed job cuts will claim around 600 posts. They come on top of the 10% reduction in staff made at the end of last year, before which the company's total workforce was around 15,000.
However Carol Bartz, chief executive of Yahoo! since January this year, said the new redundancies were not in response to poor market conditions but were from a review into Yahoo!'s operations.
The cuts are expected to be made within the global engineering and product teams.
Bartz did concede that an economy-driven decline in advertising spend had depressed the internet giant's first quarter results more than analysts had projected.
She said: "Yahoo! is not immune to the ongoing economic downturn, but careful cost management in the first quarter allowed our operating cash flow to come in near the high end of our outlook range.
"While we experienced pressure in both display and search advertising in the first quarter, we believe Yahoo! remains one of the most compelling advertising buys on the internet.
"With our leading audience properties, substantial reach and innovative advertising solutions, we are confident Yahoo! will be well positioned when online brand advertising resumes its growth."
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