Social bookmarking site Digg is cutting 10 percent of its 75 person staff. CEO Jay Adelson addressed the “headcount reduction” in a blog post; WebWare’s Rafe Needleman confirmed the percentage. Adelson said the layoffs were needed to help Digg achieve profitability this year. But he also said the company would soon add a direct sales team and other “targeted hires.”

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Digg’s long-standing display and contextual ad deal with Microsoft (NSDQ: MSFT) is still in play, but the company raised a $29 million third round in September partly to fund the development of its own ad products. Founded in 2004, Digg’s rabid user base has made it consistently the subject of acquisition rumors, but Hitwise recently reported that microblogging service Twitter had overtaken Digg in terms of traffic.