Digg CEO Matt Williams revealed in an interview with Mashable that Digg is focused on getting healthy again by cutting costs, resetting its strategy and re-entering "startup mode."

Earlier today, Williams announced that Digg would be laying off more than one-third of its staff. The company's current staff of 67 will be reduced to 42 in an effort to reach profitability by 2011. Williams told me that the cuts will be all across the board, rather than focus on a specific division of Digg. Even management isn't safe; Williams pointed to the exit of Chas Edwards, the company's publisher and chief revenue officer, as a sign that management is being shaken up as well.

"The burn rate is simply too high," Williams said. He says that the company has looked at all of possible ways to cut costs, but concluded that it couldn't keep its staff of 67 and operate profitably. He emphasized the need for Digg to be more lean in its operations. "We're in startup mode again," he stated.

On Tuesday the entire Digg team will gather at an all-hands meeting where Williams will outline the company's strategy for the next year. He revealed part of that plan to me in our interview. Primarily, the company will focus on increasing engagement with the Digg community, which lost many individuals during the disastrous release of the New Digg. He wants the company to "listen hard" to users in order to re-engage them.

What about the revenue side of the Digg equation? Williams' response was simple: Diggable Ads. He believes Digg's new ad format is an innovative and powerful ad product. The company will be "doubling down" on Diggable Ads and finding new ways they can be utilized by advertisers.

Williams was brought in to clean house and turn things around. To do so, he intends to run Digg as a lean startup. It started with today's layoffs, but he has his work cut out for him if he's to spark a comeback and achieve profitability for the social news website by 2011.