The company said the job losses, which will be made primarily from its Excite portal, would go some way to lowering operating costs, but would not go "far enough to ensure the company's viability".
The company is also shutting its interactive market services subsidiary MatchLogic, which it acquired for $89m in 1998.
The company would not give details on how much it would save from the cutbacks, or how much it needed to continue operating. In August, when it first emerged that the company faced bankruptcy, it was expected to end the year with just $20m (£13.8m) in cash, down from $154m (£106.3m) at the end of the third quarter.
The company has $1bn (£690.4m) of debt and $400m (£276.2m) in assets. Analysts had expected the company to declare bankruptcy. However, the company was unlikely to take this course of action because it would have left little or no value for equity holders.
Excite@home's shares fell 18% yesterday to 27 cents (18p) on Nasdaq.
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