Livejournal, one of the earliest blogging services, is letting go of 12 employees, a little under 20 percent of its staff. Yahoo product manager Matthew Berardo, who was hired as Livejournal’s general manager in the U.S., was also laid off.

The company, known for the quirky-interest communities formed by its loyal users, is moving all product development and design to Moscow, where Livejournal’s owner, Russian software company SUP, is based. A company spokesperson says the move is part of a plan to “build a stronger business model,” a.k.a. build a business model that’s profitable.

Livejournal’s “headquarters, technical operations (and servers), legal, administration, and the customer service teams will remain in the United States,” CNET reports. Even so, panicked users of Livejournal, some of whom have been posting for eight years, are backing up their archives and posting the best methods of doing so in case the site disappears.

Created in 1999 by engineer Brad Fitzpatrick to keep in touch with high school friends, Livejournal was purchased in 2005 by blogging software company Six Apart, which itself cut eight percent of its staff in November. SUP acquired Livejournal barely a year ago, an acquisition accompanied by Russian protests and political issues.

It’s much cheaper for the Russian company to hire locals and run its operations from Moscow, especially in the economic downturn. Livejournal is Russia’s most popular blogging service, second in users only to the U.S. Whereas online advertising is on the decline in the U.S., it’s still growing in Russia. Now, the focus is being put on Russia, with plans to release a version of Livejournal in India.

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