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Genesis Partners portfolio company AirSphere has massively reduced activity, TheMarker has learned.

On Sunday company workers were told they were being laid off, and were asked to return their company cars by the end of the week. AirSphere promised them two months severence pay.

Eddie Shalev, a managing partner in Genesis told TheMarker that the company, which employed about 25 workers, had not shut down but had cut its workforce by half. "We believe in the company and in its technology, and we will continue to support it and come up with ideas to help it," he said.

AirSphere CEO Niv Schwartz said that because the company's original market was aviation, a sector now in crisis following the September 11 events, it has decided to reduce its activity, close down its U.S. headquarters and wait out the crisis. AirSphere is now working out of its Bnei Brak headquarters.

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Niv Schwartz and Giora Shaked founded the company in April 2000. The company developed a joint co-ordination and e-commerce platform for providers of outsourcing services to a number of organizations. In the first stage the company was mostly focused on the aviation sector, and aimed at alliances with companies such as ground service companies, caterers, fuel companies and air traffic authorities.

About six months ago Genesis invested about $2 million in AirSphere, at a company value of $10 million.