Company spokesman David Emanuel said most laid-off employees are in the company's Palo Alto, Calif., headquarters, but cuts did not hit any particular segment of the business.
Last week, the company pulled plans for an initial public offering, citing market conditions.
The IPO plans, pulled in conjunction with Thursday's layoffs, suggest AltaVista is far from a financial state that would be appealing to investors. Analysts say they are not surprised given the state of the online advertising industry.
"That's the exact market that investors have been shying away from," Paul Bard, an analyst with Renaissance Capital, said when the company pulled its IPO.
Investors have turned from companies that depend on online advertising revenue as news surfaces that the market is not regaining steam. Earlier this month, AltaVista rival Yahoo sharply reduced its projections for 2001, suggesting continued depression in the online advertising sector.