SecondMarket Inc., a platform for trading shares of private companies, laid off 10% of its staff Friday as the company aims to cut costs before Facebook Inc.'s initial public offering.
Layoffs at the New York-based company come after Facebook early last week halted trading of its shares on the secondary market. The social network aims to account for its shareholder base ahead of its IPO, expected in May. It is anticipated to be the largest-ever offering from a U.S. Internet company.
"In a post-Facebook world, we have decided to eliminate some positions that are no longer core to our company's long-term mission," SecondMarket said in an email.
The company said it has no additional planned layoffs, will continue to hire in "select areas" and aims to increase headcount in the future.
SecondMarket had about 150 employees before the reductions.
Facebook's long-awaited decision to go public means private exchanges like SecondMarket and SharesPost Inc. stand to lose a big chunk of business.
SharesPost expects to see a reduction in revenue once Facebook goes public, according to a person familiar with the matter. "That's almost obvious," this person said.
Despite lower revenue, the company is still looking to expand this year. Jeremiah Hall, a spokesman at SharesPost, said the company is hoping to increase headcount from 30 people to 50 people by the end of 2012.
"The Facebook flurry was certainly good in terms of bringing a lot of people in the marketplace who otherwise wouldn't have learned about it," Mr. Hall said.
SecondMarket said it handled $558 million in private-company transactions last year, a 55% increase from 2010. About 61% of those transactions came from the consumer Web and social-media industries, with Facebook accounting for a large portion of that volume.
Private exchanges have benefited in recent years as more companies have waited longer before going public.
Start-up employees and accredited investors have aimed to capitalize on big-name tech companies before they hit the public markets.
Tech darlings, such as LinkedIn Corp., Groupon Inc. and Zynga Inc., attracted plenty of demand in the private markets before their IPOs last year.
But critics have questioned the long-term sustainability of these private-market platforms, especially since the pipeline of companies beyond Facebook appears to be thin.
Earlier this year, SecondMarket started a pilot program for trading in privately held community banks to boost its growth prospects.
Write to Steven Russolillo at steven.russolillo@dowjones.com
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