Linden Lab, the company behind virtual world Second Life, is laying off 30 percent of its staff, according to a release issued today. Labeled as a “restructuring,” the company is consolidating its software development team in North America and is “reconfiguring” its customer support department.

The move reflects a new strategy for Linden Lab, says the company, which aims make its virtual world more browser based, eliminating the need to download any software. The company is also pushing for Second Life to extend to social networks.

Rumors of the layoffs emerged a few days ago, and paint a more detailed picture of the reductions. The report says Linden Lab closed their UK and Singapore offices, cut the head count of the Seattle office by half, let the enterprise group go, and made staff reductions at their Mountain View and San Francisco offices. The shuttering of the enterprise group, which creates a customized version of the virtual world that sits behind a firewall, would make sense considering the new move for Second Life to be completely browser-based.

Second Life’s user base has been dwindling and clearly the company is trying to take the virtual world in the direction of social networks, after seeing the popularity of gaming on these platforms.

But Linden Lab isn’t completely dead. The company was reportedly valued between $658 million and 700 million a year ago. If Linden can turnaround Second Life and push the social agenda, the virtual world could rise again. Miracles can happen.

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• LINDEN LAB

Company: Linden Lab

Website: lindenlab.com

Launch Date: 1999

Funding: $19M

Linden Lab is the company that created The Second Life Grid platform and hosts the Second Life virtual world. The Second Life Grid is the technology platform used to power the Second Life virtual world. In 2007, Linden Lab opened the Second Life Grid platform to the public, enabling businesses of all sizes to develop their own virtual world environments. As of August 2008, Second Life boasts approximately one million active residents with 40-60 thousand online at any given...

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