Phonetic Systems on September 4 fired 20 employees out of 120, TheMarker.com has learned. Thirteen workers had been employed at the company's R&D outfit in Israel.

Phonetic, which had doubled its staff in the last six months, develops voice information management and data retrieval technologies for phone companies and big enterprises.

VP Development and co-founder Atzmon Gilai said that the dismissals follow the decision to confine operations to two core markets ? big enterprises and the U.S.

The company will focus on call-routing systems for big enterprises, and on exchange service systems that operate without phone operators, for the American market.

The dismissals are intended to improve the company's chances of survival, but Gilai added that it is not in distress, that it has customers and a market, and that it has ample cash left.

In February this year Phonetic secured $37.5 million at a post-money company value of $110 million. General Atlantic Partners (NYSE:GE) was the main investor (50%). GAP is the biggest American venture capital fund for information technology and Internet investments. Other investors included the giant American communication company SBC Communications (NYSE:SBC) and the Aurec Group via their joint investment company Aurum SBC Ventures, the Finnish cellular company Sonera (Nasdaq:SNRA), which is a Phonetic customer, and the funds Pitango Venture Capital, Formula Ventures, Magnum Communications Fund, Evergreen Canada Israel Investments and Sadot Research & Development Fund (LSE:SDT) Phonetic has 60 customers, among them Motorola (NYSE:MOT) and AT&T Corporation (NYSE:T). Revenue in 2000 came to $3 million.