Irish translation company Transware executed a major reduction in force yesterday by making redundant 21 of 39 American and 20 of 89 Irish employees. Insiders told us that all employees who joined with the Transware’s acquisition of Global Sight were laid off.

In the wake of the layoffs we spoke with Devin Lynch, CEO (and former VP of sales), who said that Transware had its best quarter ever in terms of sales, gaining 30 new customers. He told us that the layoffs were due to cost realignment, not that unusual for companies kicking off a new sales year and a new strategy.

So what will happen with the Global Sight Ambassador product, one of the artifacts of the flood of venture capital into language technology in the 1998-2001 software bubble? While it plans to retain know-how and project management skill in-house, Transware will offshore most of its Global Sight engineering and support activities to China where it believes it can scale the technology faster but not pay expensive Silicon Valley salaries.

Meanwhile, the company will take our suggestion of using the Global Sight product as its internal platform for increasing productivity of its translation teams — and will not sell it as a standalone software product. However, Lynch plans to continue supporting current Ambassador users such as Dell, HP, and Philip Morris. In its move to a managed service, we expect that Lynch’s sales team will encourage those companies to outsource their global content management applications to Transware, which could then shut down external, non-portal uses of the Global Sight technology.

While Transware laudably plans to offer global content development as a managed service, that category still requires an educational effort that will challenge the marketing budgets of smaller firms. And with mid-tier firms like Moravia, RWS, and TransPerfect looking for growth by acquisition, we expect that Lynch may get some serious buy-out inquiries while he ponders Transware’s transition to being a managed services provider.