An internal memo written by a Yahoo executive last week suggests that the company may consider cutting up to one fifth of its staff.

Yahoo senior vice president Brad Garlinghouse wrote the memo, which was leaked to the Wall Street Journal.

Garlinghouse likens Yahoo's business strategy to "peanut butter spread thinly on bread", and recommends a huge overhaul. The analogy has led journalists to label the memo 'The Peanut Butter Manifesto'.

The executive claims in the memo that many of Yahoo's programmes end up competing with each other, rather than actively targeting a set area and going after competitors.

Garlinghouse also wrote of an "apathetic" workforce at every level of the company. "We have lost our passion to win," he said. "Far too many employees are 'phoning it in', lacking the passion and commitment to be part of the solution. "

This "solution", according to Garlinghouse, includes reducing staff by 15 to 20 per cent, eliminating what he terms "non-core businesses and duplicative projects" and completely overhauling the structure of Yahoo.

"I believe we must embrace our problems and challenges and that we must take decisive action," he wrote. "Short-term band-aids will not get us there."

While Yahoo verified the authenticity of the memo in earlier reports, company spokespersons did not return requests for comment from vnunet.com.