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Originally published January 3, 2007 at 12:00 AM | Page modified January 3, 2007 at 6:16 PM

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Jobster lays off 60 workers as part of restructuring

Unlike most layoffs, which happen behind closed doors, this one was far from secret.

Seattle Times technology reporter

The day of reckoning has arrived for Jobster, a darling of the Web 2.0 age.

After a soap opera-like drama unfolded online over the past two weeks, Chief Executive Jason Goldberg said today that 60 of the online recruiting company's 145 employees will be laid off in an attempt to reach a goal of becoming profitable this year.

Unlike most layoffs, which happen behind closed doors, this one was far from secret. Dozens of people in the recruiting and technology communities started blogging about the company, which develops technology to help corporations recruit employees, about two weeks ago.

Goldberg added to the speculation by blogging about it himself, saying that the company is entering a phase of restructuring and that his goal is to create a profitable company in 2007.

Jobster, which Goldberg founded in 2004, has grown fast. The company raised $48 million in venture capital from well-known investors, including Reed Elsevier, the London publishing company that owns LexisNexis, as well as Bellevue's Ignition Partners, Mayfield Fund and Trinity Ventures. In the past two years, Jobster acquired at least two companies and moved from its Pioneer Square digs to a new office overlooking Puget Sound in October.

Goldberg wrote on his blog Friday: "Why would a relatively young company with millions of dollars in the bank, real revenues, and hundreds of customers (over 100 new customers signed in just the past 2 months alone) be undergoing a strategic review of how best to build long term value while driving towards near term profitability? Answer: isn't the better question why wouldn't we be?"

Goldberg has faced criticism — much of it through anonymous comments posted on blogs — for the way Jobster's restructuring has unfolded.

First, Jobster's viability was put into question. The company was supposed to be part of a new era of business models, called Web 2.0, which values substance over glamour unlike the dot-com days of the '90s. Second, Goldberg faced criticism over sensitivity toward employees, who claimed they found out more online about their fate than through internal communications.

Goldberg shrugged off those comments in his blog.

He wrote: "Why would a ceo be so public with his thoughts and open himself to so much public scrutiny and criticism? Answer: Shouldn't we actually ask ourselves: 'Why not?' Why am I so comfortable blogging here right alongside the right hand column on this blog which has feed after feed of public comments and criticisms? Answer: transparency. Embrace it. Don't run from it."

At noon today, the company embraced transparency even more and gave an update to select members of the media.

Jobster confirmed that as part of the layoff, a handful of executives also were let go, including Tracy Lawrence Burman, president of business operations; Todd Leeson, vice president of marketing; Brad Kendall, senior vice president of sales; and Kerry Rupp, vice president of business development.

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As for the rest of the employees who were let go, 40 in the Seattle office were told this morning by the executive team. Others were told on a conference call.

Most of the laid-off employees were part of the in-person sales team, Goldberg said.

He explained that the company is tweaking its three-prong sales approach, which consisted of in-person sales, telephone sales and online sales. He said an evaluation determined that the in-person sales team was the most costly and creating a consulting business within the company.

"We began experimenting with over the phone and found you could sell the exact same customer the same product in a different manner," Goldberg said. "I did not take $48 million to become a consulting business, but to become a technology company."

Tricia Duryee: 206-464-3283 or @seattletimes.com

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