Internet firms react fast to avert implosion

Air is starting to leak from the Internet startup bubble, underscored by a wave of layoffs amid the slumping economy. The job cuts signal an abrupt reversal of fortune for an industry that until recently was flush with investor money and extravagant employee perks. The question on virtually every startup executive's mind is whether the retrenchment is a minor blip or a repeat of the dot-com implosion eight years ago, when sites like Pets.com, Webvan and eToys all went belly-up. So far, most agree that the cuts are proactive rather than a sign of immediate distress. By paring back early, they say, the companies will be able to survive longer if it becomes too difficult to raise more venture capital down the line.