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Marketing firm Lot21 trims staff

The company becomes the latest interactive-marketing agency to reduce operations as a result of dwindling demand in the marketplace.

Lot21 weeded out more than two-dozen staff members last week, becoming the latest interactive marketing agency to trim operations because of dwindling demand in the marketplace.

The company, which employed about 150 in San Francisco and New York, laid off 25 to 30 workers on Thursday, sources familiar with the company said.

Kate Everett-Thorp, chief executive of the San Francisco-based company, confirmed the layoffs Monday.

"We hired optimistically for the fourth quarter, and, due to industry market conditions in general, we have decided to streamline our business," Everett-Thorp said in a statement.

The move is the latest in a string of cutbacks at digital-marketing firms and consulting companies, which have been weakened by market pressures and waning dot-com demand for marketing services.

Last month, Zentropy Partners, the online arm of advertising giant McCann-Erickson, announced plans to restructure and lay off 10 percent to 15 percent of its staff to account for slower growth than anticipated. Internet consulting company Razorfish said also last month that it will slash up to 200 jobs, or 10 percent of its staff, in order to stay profitable. In September, both iXL Enterprises and US Interactive reported layoffs.

For Lot21 and many others, the cutbacks are in response to the tightfisted budgets of Internet companies fighting to reach profitability or just stay afloat during lean times. Last year, cash-flush dot-coms spent lavishly on marketing campaigns during the holiday season. But this year, the mood has turned much more conservative, forcing agencies to reevaluate their growth projections.

Representatives for Lot21 said the company hired additional staff earlier this fall in anticipation of a growing client list during the holiday season. However, weakened demand for marketing services undercut these plans.

Lot21, which plans media strategies for such companies as eBay, Sega and Bank of America, sees a silver lining in the next year, however.

"We are continuing to move forward with expansion efforts in Q1 of Y2001," Everett-Thorp said.