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Bigstep.com lays off 20 percent of work force

The Web hosting company lets go 34 people in its San Francisco headquarters, the latest application service provider to suffer financial woes.

Bigstep.com took a step back this week by cutting its staff by 20 percent.

The Web hosting company let go about 34 people in its San Francisco headquarters Monday. The layoffs, effective immediately in most cases, are meant to secure the company's long-term growth.

"It was a proactive move to reinforce our viability as a company, so that we can continue to help small businesses build profitable businesses themselves," said company spokeswoman Anna O'Neil.

Bigstep offers a suite of Web hosting services to small businesses looking to build and market e-commerce sites. It stands out in the application service provider (ASP) market because it gives away many of its services. The company makes its money by selling services, such as customer relationship management, on top of its standard Web hosting software.

But the ASP market has suffered mounting blows in recent months. Last week, HotOffice.com said it could close its doors this month. Red Gorilla, which also offered free services, closed in October. And Pandesic, a joint venture of Intel and SAP, shut down in July.

Bigstep, founded two and a half years ago, is privately held and financed by such investors as Worldview Technology Partners, InterWest Partners, Compaq Computer, Office Depot, U.S. Venture Partners, Argus Capital and The Washington Post Co., among others. The company has raised a total of $65 million from investors.

At the time of the layoffs, the jobs page on the company's Web site listed about 18 positions, including a director of e-commerce product management and engineering slots. A spokeswoman said the page would be updated.