Second Life-Parent Linden Lab Cuts 30 Percent Of Staff

Linden Lab, which has maintained a big following for its Second Life virtual world but also has seen it surpassed in buzz and growth by a host of other gaming and social sites, is cutting 30 percent of its staff as part of a restructuring.

Linden Lab says in a statement the moves will “strengthen” the company’s profitability and also enable it to “extend the Second Life experience into popular social networks” and the mobile phone.

Linden Lab executives have lamented for several months now that Second Life isn’t interconnected enough with other sites on the web, saying it is too difficult to share actions on Second Life on third-party sites. In February, the company bought up online avatar community Avatars United, as part of an effort to change that.

The company’s financial state isn’t known. Linden Lab has raised about $19 million in funding but hasn’t raised outside cash since 2006. At least two of its backers have sold their stakes; one unnamed investor sold its holdings to late-stage investment firm Stratim Capital a year ago, while Catamount Ventures sold its shares in November 2007.