The layoffs stemmed from overall conditions in the professional-services market, according to the Boston-based firm, which Jim Sims launched in March with partner Michael Treacy.
A key condition was the speed with which older enterprises were moving online, a Gen3 representative said.
"Established companies are integrating online businesses into their overall operations with greater deliberation than many people might have expected," she said. "Because of the change of the market condition, principally within the dot-com sector, some established companies aren't moving as swiftly as we had anticipated over the last few months."
Employees affected by the job cuts, which occurred late last week, were offered severance packages, the company said.
To set itself apart from the growing crop of Net consulting companies, Gen3 focused on helping larger, more established companies build their online businesses.
The group's consulting work is aimed at helping brick-and-mortar companies improve or simplify the purchasing process by moving that to the Web. Gen3, which is backed by Dell Ventures and Accel Partners, is helping clients develop business-to-business marketplaces that link them to their suppliers and partners over the Internet.
Gen3 joins a growing list of Internet consulting companies that have recently laid off employees in response to changes in the Net consulting market.
iXL Enterprises, which helps clients with projects ranging from the development of Web sites to the formulation of Internet strategies, recently cut about 350 jobs as it continues to struggle to reach its profit goals. iXL blamed a slowdown in spending among corporations on Internet strategy and professional services for the recent layoffs.
Known for its expertise in helping dot-com start-ups speed their businesses onto the Web, iXL, like others in its sector, has recently moved its focus away from dot-coms to larger, more established clients that want long-term advice and need more complex systems-integration work.
Gen3 said it intends to introduce three new service practices in an effort to fine-tune its business model to serve the changing times. The new practices, which the company is expected to announce in the next few weeks, will revolve around its existing service lines including strategy, technology and entrepreneurship. Gen3 is also in the business of incubating, creating and launching new companies.
In adjusting its business model, Gen3 said, the company had to eliminate some positions that became unnecessary but intends to add other positions that fit the new areas. The company is aiming to become profitable in 2001.