Israeli-American investment company Yazam, whose future has been uncertain for some time, has decided to lay off about half its 80 employees.
The company has also decided to freeze new investments in start-ups because a substantial number of its portfolio companies are experiencing financial difficulties.
A company statement said: “The board decided to institute immediate cost reductions, while it continues to examine all strategic options for the business.”
The decision was made at a board meeting of the Israeli-American company. Reports suggest that six of the lay-offs will be in the Jerusalem office. The Guardian newspaper says that the company has decided to suspend its European operations.
Yazam acquired First Tuesday in July last year for an estimated £36m. The Guardian suggests that the internet networking company could be sold for as little as £2m.
Yazam was launched in July 1999.The vehicle raised capital by seeking investors and acquiring a 5 per cent stake in companies for which it secured funding.
To date, it has raised $74m from investors including Texas Pacific Group, Carlyle Internet Partners Europe, Merrill Lynch, Apax Partners and JP Morgan. Approximately $40m has yet to be invested but investors are said to want their money back.