Digg CEO Matt Williams has just announced a wave of new layoffs at the struggling social media company. The current staff, 67, will be downsized to 42, more than one-third of the total team.

According to the letter (and the phone call) we received, Digg's current burn rate is simply too high, and the only way to reach profitability is to cut expenses.

Digg's been reducing its staff size periodically over the past couple years; in May, 10% of Digg staffers were laid off, and a 2009 staff cut also reduced the company's size by 10%.

In addition to potential changes to salaries and other fixed costs, the company is laying off 25 people. It's not clear currently whether the cuts will be from engineering, sales, business development or another department, however, Chief Revenue Officer and Publisher Chas Edwards announced his plans to retire from the company earlier this morning.

In addition to the announcement of layoffs, Williams also hinted at a new direction and a new strategy for the company. There will be announcements related to the company's future plans tomorrow. Everybody at the company is currently in an all-hands meeting.

We've posted the letter Williams sent to the entire Digg team in its entirety below: