Jobster, the one-time high-flying online recruiting startup, laid off more than a third of its staff today as it grapples with a slowing economy. About 15 people are losing their jobs.

"This is an unbelievable market condition," said Jobster Chief Executive Jeff Seely. "I've been around investing and the markets and the economy for a long time and I have never seen anything as severe as what we are living through at the moment."

At its peak, the Seattle company employed about 150 people. It now has 25 workers.

Seely took over the CEO role from Jason Goldberg late last year, raising an additional $7 million from Ignition Partners and others in the Spring. Total funding stands at $55 million.

Even with the extraordinary amount of capital behind the company, Seely said that Jobster needed to extend its cash position in order to weather the economic storm.

"The market is getting cold. It is harder to sell clients. It is harder to grow the business," said the former investment banker who previously led Bellevue-based ShareBuilder. "If we want to plan for the future, we need to be taking all of that into consideration."

Seely called the layoff decision "unpleasant" and "horrible," but necessary to better position the provider of online recruiting tools. He declined to say how much cash it has left in the bank, adding that the board did not consider shutting down the business. 

Jobster, which has tested a number of different business concepts since it was founded in 2004, now is focused on selling online recruiting software that helps companies manage job prospects. That business could be hurt as unemployment rates rise.

But Seely sees opportunity. "I think the next year will be an interesting time because a lot of really good people will be out on the street," he said. "I am hopeful that the Jobster prospect platform is just what companies need to manage all of those resources. They may not be hiring now, but it is a great time to be farming now for a future harvest."

The current layoff was handled much differently than the previous reduction that eliminated 41 percent of the staff in January 2007. In that layoff, word spread through the blogosphere before employees were notified. And Goldberg alluded to the upcoming layoffs in a blog post, ignoring requests from colleagues to stop fanning the flames.

"Why don't i listen to my pr folks when then tell me to stop blogging? Answer:  'cause i'm different and i hate being handled," he wrote just a few days before the layoffs were announced.

Seely has kept a much lower profile since his arrival at Jobster, but in this instance felt compelled to share details on the changes in the business.

Jobster is one of the latest Internet startups in Seattle to reduce staffing. Others include Avelle, Intrepid Learning, AdReady and Redfin.