Cozi, the family calendar and scheduling service, is the latest Seattle area startup to cut staff amid the deepening economic recession. On Monday, the company laid off five of its 41 employees.

Co-founder Robbie Cape said the company has been rapidly adding new registrations (125,000 family members alone this month). But, as an ad-supported business, Cape said "we can’t expect that we’ll be immune to the market conditions around us."

"This change is about ensuring that the company is the right size to carry us through the economic situation that is all around us, even if that lasts for several more years," he said.

The layoffs were especially tough for Cape since he has always stressed the importance of creating a family-like culture at Cozi.

"I hired most of them, so even one cut is emotional for me," said the former Microsoft manager. "We have tried to do this in a way that keeps with our company values and even as such, these past two days have been very hard for me."

Cozi has raised about $16 million from angel investors and newspaper giant Gannett, with Cape saying last June that he planned to focus on growth rather than profitability.

Obviously, the market has radically changed for Cozi and dozens of other ad-supported Internet upstarts. Last November, the company said that it had surpassed more than one million family registrations, helped in part through its partnership with Gannett, consumer products giant Whirlpool and publisher Meredith Corp.

Families use the software to create online schedules for haircuts, sporting events and other activities, as well as to create lists, journals and notifications in order to keep family members up-to-date.