The listed online estate agent said it will lose ‘approximately 20%’ of staff and reduce next year’s cost base by £5m.

But it will increase its marketing spend by up to £1m, it said in a statement to the stock market today.

Staff will get a month’s notice ‘so it is anticipated that the costs arising from implementing the changes will be taken in 2008 without any material impact on 2008 profits,’ it said.

Rightmove will also scale back its overseas business to reflect a ‘decreased demand for property in continental Europe’.

Regarding the loss of staff, Rightmove said: ‘These are the first redundancies that the company has made as a result of the downturn in the UK housing market.

‘The scale reflects the company's view that the current challenges will continue through 2009, though not at any worse level than we have previously indicated.'

Rightmove will also reorganise its estate agency sales force and customer service teams into account management teams, each covering a region of the

Country. It plans to increase its focus on the national and regional house builders as well as the growing housing association market.

Rightmove believes that these actions which will allow us to maintain or increases our position as UK no.1 in terms of home hunters and keep margins at or close to current levels’, it said.