By Steven Russolillo
(This post was originally published on sister blog MarketBeat.)
SecondMarket Inc., a platform for trading shares of private companies, laid off 10% of its staff on Friday as the company aims to cut costs ahead of Facebook's upcoming 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 is aiming 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 prior to the reductions.
Facebook's long-awaited decision to go public means private exchanges like SecondMarket and SharesPost stand to lose a big chunk of business.
Representatives from SharesPost weren't immediately available for comment.
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, Groupon and Zynga, 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 in an effort to boost its growth prospects.
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