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Reciprocal, a firm that helps companies sell music and other digital assets on the Internet, is slashing two-thirds of its work force to save money.

The restructuring guts the Buffalo office, eliminating 28 jobs and leaving seven employees.

Reciprocal was once considered a rising technology star in the "Buffalo Byte Belt," the name of the fledgling downtown technology sector. The company employed 55 people locally when its staff peaked in 1999.

Reciprocal is consolidating most of its 40 remaining employees at a technology development and service center in Raleigh, N.C., while keeping a small headquarters and sales office in New York City and a small administrative office in Buffalo.

The company, which has been bathing in red ink, is trying to conserve cash while it awaits an anticipated boom in demand for subscription content services on the Internet.

"We see the market as being tough for the next several months, and to conserve our cash and come out at the other end and be there when that demand emerges is the most important thing at this point," said Howard Singer, senior vice president for marketing and product strategy at Reciprocal.

The market is still evolving as copyright issues for music, books and software are settled and popular free sites develop new subscription services. Reciprocal's revenue has been growing 100 percent on an annual basis, but the growth is not as rapid as the company anticipated.

"We've seen substantial growth in revenue, but it's not enough to sustain the size of the company we were," Singer said.

Reciprocal's financial backers include Microsoft and Softbank. The company, which provides digital keys for encryption technology, was spun off by Softbank in 1996.


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