AltaVista has cut 160 staff, or 30 per cent of its workforce, as it moves away from being an internet portal. The latest round of cuts leaves the firm with about 340 staff. Last September, it employed around 1000.

The company will now concentrate on its core search engine technology, according to newly appointed chief executive James Barnett.

Barnett, the firm's first chief executive since Rod Schrock resigned almost a year ago, joins from MyFamily.com, an internet service allowing users to trace their roots and distant family members via the internet.

AltaVista confirmed that many of the job cuts were being made in its comparison shopping service, which is being phased out, and that there were layoffs in several other departments.

Barnett said the firm was still working to regain lost ground on search engine Google after the failure of ambitious, and expensive, plans to compete in the portal space with the likes of Yahoo.

According to research firm Jupiter Media Metrix, AltaVista has slipped from the 14th most visited web property in May to number 50 today, while Google has risen from 18 to 16.