The cheery stock photos on YouSendIt's sleek website send a signal: We're all business. The four-year-old file-transfer service has been trying to reinvent itself as a corporate "content-delivery solution," without much success. The company has laid off 20 percent of its 70-person U.S. workforce, as well as slashing its ranks of overseas developers, a tipster tells us. The company's VP of marketing has also vanished from the website's executive bios page. We can't wait for the memo from CEO Ivan Koon telling employees how troubled times require stern decisions. What Koon will almost certainly not say:

  • That the company has already lost two of its three founders, with the last one, Ranjith Kumaran, in a do-nothing CTO job with no one reporting to him.
  • That the company's $14.5 million in venture-capital funding is running out fast.
  • That the company's big showcase deal with the city of Los Angeles has generated publicity but very little in revenue, since it was struck at the ridiculously low rate of $1 per employee per year.
  • That YouSendIt should never have grown to 70 employees in the first place.

YouSendIt is a perfect example of the layoff lie: A desperately mismanaged company using economic fears to mask the fact that its business would be in deep trouble, in good times or bad.