Ending days of speculation, Jobster chief executive Jason Goldberg announced the job cuts and portrayed them as part of a push to become profitable. The company aims to generate positive cash flow this year, partly by shifting away from in-person sales and support. The Seattle-based firm will rely on phone sales and support as well as its Web site, and focus its energies on developing new technology, Goldberg said.

“Jobster’s customers consistently report that they derive the most value when our technology helps them match with hard-to-find candidates,” Goldberg wrote in a blog posting Wednesday. “Accordingly, we are choosing to further focus our resources in 2007 on building innovative technology that helps our customers better locate those hard- to-find-candidates while creating a unique online environment for job seekers.”

Jobster has earned praise for its service, which combines elements of social networking with job posting capability. Among the products Jobster offers is software that makes it easy for a firm to ask its employees for the names of the top colleagues they’ve worked with in the past, as well as technology for asking those referrals if they’d like to learn more about the company. Jobster software also is designed to help companies distribute job ads via e-mail—messages that can be forwarded easily to others and tracked by the employer.

Companies have been buying up recruiting software products as part of a greater focus on talent management. Using social networking technology for recruiting remains experimental but is seen as promising.

Goldberg said that his three-year-old company, which has raised $48 million in funding from investors, is not low on cash. Nor is it struggling to snag customers, he said. Although Goldberg conceded adoption by large organizations was slower than anticipated last year, Jobster signed up more than 500 customers for paid recruiting services in 2006. The company’s revenue grew by 482 percent last year.

The bulk of the employees affected by the layoff are involved in in-person sales and support efforts, Goldberg said. Four executives also were laid off, including Brad Kendall, senior vice president of sales.

—Ed Frauenheim