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Tech Industry

Zefer cuts its staff by 15 percent

The Internet consulting firm says it has laid off 120 employees across the company in order to sustain profits as sales cycles slow.

    Zefer, one of the few Internet consulting firms still private, has laid off 120 employees, cutting approximately 15 percent of its total work force, the company confirmed Monday.

    The company, which twice last year withdrew plans for an initial public offering, said it trimmed its work force earlier this month in order to sustain profits.

    "We?re growing from a revenue standpoint, but like other smart businesses, we needed to align ourselves (with the economic downturn) to make sure we maintain our profitability," said Sara Buda, a spokeswoman for the Boston-based firm. Though Buda would not disclose specific revenue figures, she said Zefer posted its first profit in the quarter that ended Dec. 31.

    Zefer is the latest Internet consulting firm to let employees go in a time of leaner pickings.

    Many companies in the sector, including Scient, iXL Enterprises and Razorfish, recently have reduced their work forces in order to cut expenses. Most Net consultants, formerly bright stars in the economic sky, have seen the clouds roll in as demand slowed for their specialized services in developing for the Web and helping clients devise their Internet strategies.

    The consultants have shifted their gaze from once popular dot-com clients to a Fortune 500 clientele that has more money to spend on consulting. The shift has been hard for many players in the sector that have not been focusing on traditional consulting engagements, which demand a different set of skills and expertise.

    "We?re still winning great deals, and the good news is that while the sales cycles are slower, the deals are larger and more complex," said Buda. "While growth is still strong, there is a slight slowdown."

    The layoffs, which took place earlier this month, affected a range of positions across the company, from consulting to administrative jobs. Zefer, which had employed a total of 800 workers, operates offices in Boston, Chicago, San Francisco, New York, Pittsburgh and London.

    Last November, while many of its rivals were sounding revenue warnings and layoffs, Zefer won an additional $20 million in funding. The company has been using the investment to fund its expansion in the United States and overseas.

    Zefer, which planned to debut on Wall Street last year, did not rule out another IPO attempt.

    "We?re in a strong cash position, so it?s just a matter of determining when the market will support the valuation we deserve," said Buda. "There?s no need to rush into it."