The web giant announced it will lay off 600 to 700 workers, or five percent of its team.
In a conference call following the earnings release today Bartz said the company needed to revamp itself and, "We have to create kick ass experiences for our users."
The Sunnyvale-Calif.-based company reported earnings of 15 cents a share minutes after the closing bell, topping anaylsts' forecasts.
Yahoo inc. said its first quarter net income fell to $117.6 million, or eight cents a share. That is down from $536.8 million or 37 cents a share from 12 months ago.
This marks Yahoo's third round of mass layoffs in a little over a year, but the first batch since the Sunnyvale-based company hired technology veteran Carol Bartz as its chief executive in January.
"Yahoo! is not immune to the economic slowdown," said Bartz, who has now been Yahoo CEO for 100 days. She added that those losing their jobs will find out in the next two weeks.
Yahoo also says its slump worsened in the first quarter as the recession made it more difficult to sell the ads that generate most of its profits.
Last year's results included a non-cash gain of $401 million. But Yahoo's profit this year still would have been lower even after subtracting last year's one-time boost. Revenue fell 13 percent to $1.58 billion.
Yahoo dumped about 1,000 jobs in February 2008 and another 1,500 or so late last year while co-founder Jerry Yang was still running the company. Yang stepped down, largely because he wasn't able to snap the company out of its financial funk during his 18-month tenure as CEO.