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habboThe company that created the popular Habbo virtual world plans to lay off 20 percent of its employees, according to published reports.

Sulake is laying off dozens of its 300 employees, mostly at its worldwide headquarters in Helsinki, Finland. The company’s main business is Habbo, a teen-focused cartoon world where users can create their own avatar characters, decorate their rooms and socialize.

All seems good in that world. In September, the company said that more than 144 million Habbo characters have been created and that the world gets 13 million unique visitors each month. If the user base is still growing like weeds, the question is, why are they making cuts now?

Sulake was established in 2000. Investors include Taivas Group, Elisa Group, 3i Group plc, and Balderton Capital followed by Movida Group (in Japan), the company’s founders Sampo Karjalainen and Aapo Kyrölä, Sulake’s CEO Timo Soininen and other personnel. Sulake’s Habbo competes with rivals such as Meez, Gaia Online, and IMVU.

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Last year, Sulake reported profits of $7 million on revenue of $73.6 million. Sulake also operates the Finnish social network IRC-Galleria and recently launched its Bobba virtual world for mobile phone users. Sulake has not yet commented.

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