Marissa Mayer started her reign as Yahoo CEO with nice things like free lunches and company-issued iPhones, but the Internet giant is still stumbling and now it's time for her to cut the fat, which means using Google-like efficiency to cut the pay and lay off the 20 percent worst performing employees, sources tell AllThingsD's Kara Swisher. You knew it couldn't be all rainbows and birthday piñatas forever, right? Through its slow, sad slog through the 2000s and now 2010s, the company has periodically had big rounds of layoffs, including a big 14 percent cut last April. This is the first mention of downsizing we've heard since Mayer took over the company, but deep down we all knew it had to happen.

"Yahoo probably needs to be cut in half," one source told Swisher and, apparently, Mayer, a few months ago. "But no one has had the guts or stomach to do it yet." It doesn't sound like she took that advice, only looking at the bottom 20 percent of employees, with only an undisclosed percentage of those people getting let-go completely.  

As unfortunate the news, Swisher claims Mayer hopes to downsize the effects of the cuts on morale, doing things a little less "haphazardly." "Mayer is aiming to make the process more organized and talked about this performance-based system in a company meeting in September," writes Swisher. Before that process plays out one big perk is already going to go: Mayer has also announced the end of the company's usual end-of-the-year week of vacation, Swisher's sources say, which we imagine will do wonders for morale.