By Yuval Dror

Ynet, the Internet company launched with much fanfare in ** by the

Yedioth Ahronoth

news group, is firing 40% of its staff.

The first wave of dismissals at Yedioth Internet, the company running the Ynet website, will begin in a few days. The company currently employs 120 people.

Yedioth is also seeking a strategic partner for its teenagers website


, launched just a month ago at an investment of $100,000.

The group made the decision to reorganize Ynet some months ago in order to cut costs. At first the site had generated all its news independently. It now incorporates news appearing in the daily

Yedioth Ahronoth

paper, which enables staffing cutbacks. The decision to merge content led to several resignations of key persons, including Ynet's editor in chief, Zeev Jasper, its chief executive Moti Schwartz, and senior VP Modi Frydman.

In recent weeks the heads of sections news, business, computers, Internet have been asked to list their key staffers. The news spread, creating a grim mood throughout the company.

Yedioth Internet executives refused to comment.