Last gasp...?

LiveJournal, a mature blog community launched in 1999, cut 12 employees — about 20% of its workforce — without severance yesterday, reports Gawker (via LiveJournal's xb95).

A previous version of this article stated the staff cut consisted of 20 employees. In an email to the editor, a company representative corrected the figure.

In December 2007, founding firm Six Apart sold LiveJournal to SUP, a firm based in Russia, where it already possessed a sizable following. The move was meant to narrow Six Apart's focus to its top three blog offerings: TypePad, Moveable Type and Vox, sites "where we really want to be great," said Six Apart's Chris Alden.

Russian accounts on LiveJournal doubled to 1.35 million shortly after the transition. In August 2008, the blog site launched a new display ad format.

Yesterday's lay-offs included San Francisco-based product managers and engineers. "[Only] a handful of finance and operations workers" were left untouched, according to Gawker, suggesting the site's been "left on life support." Former Yahoo exec Matt Berardo, hired last summer, left his position as VP/General Manager "along with other valued colleagues," a company representative stated.

Moving forward, LiveJournal will be jointly run by Stephanie Gravelle, Director-Finance/Administration, and CTO Sergei Komarov of SUP.

Ironically, given LiveJournal's refusal to provide severance to cut bloggers, former parent company Six Apart recently launched a "blogger bailout plan" targeted to content providers in unexpected dire straits.

SUP paid about $30 million for the site — a price that paid due homage to LiveJournal's reputation as a top blogger community, but that failed to acknowledge such communities have yet to produce a viable revenue model.

The decision to cut a significant portion of its staff lends credence to pressure the economy has put on popular dot-com "business" models, like social networks and blog sites. Some say even the ones with the greatest brand equity — including MySpace, Facebook and Twitter — will ultimately tank if they fail to produce a profitable model in 2009.

Other companies conducting mass layoffs or reorgs in web publishing include Crain Communications, Nielsen and Gawker.