With the automotive industry teetering, it is a tough time to operate an ad-supported social network for car enthusiasts.

Because of those challenges, CarDomain.com today announced that it is cutting half of its staff. Sixteen employees are losing their jobs as the Seattle company attempts to prepare for what is believed to be a significant slowdown in the online automotive advertising category.

“Although we are growing overall traffic and member engagement year-on-year, the economy and the automotive industry have taken a significant turn for the worse, leading to very pessimistic industry projections of advertising budgets and a protracted recovery period," said CEO Rajan Krishnamurty in a statement. "To significantly reduce our burn rate and preserve capital, we laid off a number of employees today. They can be very proud of their contributions to the company. Going forward, CarDomain is well positioned as the leading social media property in automotive to leverage the upside in the economy.”

Founded by Alex Algard in 1998 as a mobile electronics store, CarDomain dropped the online retail portion of the business last year to focus on the social networking aspects of the business.

Users visit the site to tout their automobiles, sharing photos, vidoes and mechanical tips with other visitors. With more than 600,000 cars showcased, the company's monthly visitor tally recently surpassed 3.5 million unique visitors.