Lulu cuts jobs as revenues slow

Company reacts to credit freeze

Lulu.com, one of the Triangle's fastest-growing technology companies, laid off 24 employees this week to reduce expenses amid the slowing economy.

Bryce Boothby Jr., hired as Lulu's president last year, was among those let go.

The online book publisher now has nearly 100 workers. Lulu still plans to move its headquarters from Morrisville to Raleigh, probably by January.

Lulu needed to operate profitably in the current economic climate, said Bob Young, the founder and CEO. With the credit and capital markets "frozen solid," Lulu couldn't continue burning through money at its previous pace.

"We're very disappointed we were forced into a position of having to cut costs," Young said. "The really sad thing about doing this, these are good people we would have much preferred to keep."

Lulu officials notified workers on Tuesday and Wednesday, after "several stressful evenings to come up with the most effective way of doing this," Young said.

Lulu will provide severance and job-placement assistance, said spokeswoman Gail Jordan.

But the laid-off workers face an increasingly grim job market, even for people with marketable tech skills. Last week, Sony Ericsson announced it cut 400 jobs at its Research Triangle Park offices.

In a phone interview Wednesday, Boothby said he is one of those who doesn't have another job lined up. He expects to "find out shortly" how tough it will be to land a new position.

"I imagine it will be the same for everyone," Boothby said. "We're heading into a difficult period of the economy."

Boothby said he has no hard feelings towards Lulu or Young.

"The company is actually doing quite well," Boothby said. "It's more a reaction to what's happening in the marketplace."

Young has assumed more oversight of Lulu's daily operations. He declined to disclose details of the privately held company's financial health but said revenue growth has slowed.

Young was previously CEO of Raleigh-based software company Red Hat, a position that made him rich and funded new ventures. He founded Lulu in 2002.

He also is a sports fan and has owned the Hamilton Tiger-Cats of the Canadian Football League since 2003.

Young also owns a stake in the Carolina RailHawks, the Cary professional soccer team. Young has been friends with RailHawks owner Selby Wellman since they served together on Red Hat's board of directors. He jumped at the chance to invest in the team.

"Why wouldn't I get behind the fastest-growing sport in the fastest-growing market run by a guy I have the utmost respect for?" Young said.

The stake is a financial investment that won't take his time away from Lulu, Young said.

Lulu is moving its headquarters to the historic N.C. Equipment Co. building on Hillsborough Street in Raleigh, known for its big, yellow bulldozer sign. The new building, which is still being renovated, will be less expensive than the company's current offices in Morrisville, Jordan said.

Company officials expect to move by January.