BY TOM SOMACH

NETeller, the giant e-wallet that was financially crippled last month when it abandoned the U.S. market, has announced it is laying off 250 employees.

The layoffs are a direct result of the massive drop in business NETeller suffered when U.S. authorities arrested NETeller’s founders last month and then NETeller pulled out of the U.S. market, the company said.

The layoffs were not unexpected–in fact, they were widely anticipated throughout the Internet poker industry, as most of U.K.-based NETeller’s customers were American and most of them used NETeller to electronically fund and collect from Internet poker rooms and other Internet gambling sites.

Once NETeller lost the U.S. market, it lost most of its business, and now it’s losing many of its employees.

NETeller made the announcement about the layoffs in a press release posted on its corporate website, www.neteller-group.com. (The release can be accessed at www.neteller-group.com/press/en/125.htm). NETeller also maintains a company website at www.neteller.com.

The press release, in part, states: “As a result of (NETeller’s) voluntary withdrawal from the U.S. market, (NETeller) has substantially completed the necessary reorganization and restructuring of its operations to reduce its headcount and align related costs with anticipated revenues of its worldwide business…transfer volumes and customer enquiries (all) decreased substantially since (NETeller) ceased processing transfers for U.S. residents.

“Staff reductions will total around 220 employees (and) a further 30 redundancies will arise from the relocation of (NETeller’s) Gatwick-based operations… Following these staff reductions, (NETeller) will employ approximately 425 staff across its European, Americas and Asia-Pacific operations, down from a peak of over 1,000 during 2006…”

The press release went on to quote NETeller president and chief executive officer Ron Martin as saying: “The events of the past months have led to challenging times for (NETeller) and the board has taken these measures to ensure…sustainable business going forward.

“We would like to thank all of our employees who have contributed to the growth of the NETeller business over the past few years, and for those who have left or will be leaving…we wish you well for the future…NETeller continues to have a strong future ahead and presents many exciting opportunities for its employees.”

NETeller is not the first electronic money-transferring service or so called “e-wallet” to sustain layoffs after pulling out of the U.S. market.

My Citadel (www.mycitadel.com), a Canadian competitor of NETeller, recently announced massive layoffs of its own, after it too abandoned the U.S. market last month.