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Once viewed as a company that might revitalise flagging investor enthusiasm for Internet stocks, Loudcloud's move comes just two months after its initial public offering fell short of expectations.
Loudcloud officials hope the layoffs will allow the company to reach the break-even point, where expenditures are in line with revenues. Once the staff cuts are complete, the company will have 507 employees.
The cutbacks will come primarily from cuts in "internal support functions", the company said, adding that customer support and research and development functions would not be affected.
Loudcloud said it is also taking unspecified steps to maximise use of its data centre facilities in North America and Europe. Additional cash savings at the company are to be achieved by cutting back on headcount-related and discretionary expense items, said Loudcloud.
As it slashed its workforce on 2 May, Loudcloud also announced changes to its senior management team, including the appointment of two senior executives.
The company has appointed Shellye Archambeau, a former Blockbuster executive, as its chief marketing officer, and former Excite@Home executive John O'Farrell as its executive vice-president of business development. Meanwhile, Mike Green, Loudcloud's president of field operations, is "returning to retirement", said a spokesman.
Visit Loudcloud at www.loudcloud.com .