Short film broadcaster AtomShockwave has hit hard times and has been forced to slash jobs and close key offices.

The move comes less than three months after AtomShockwave was formed from the merger of Atom Films and Shockwave.com and only a year after Atom Films signed a deal with Oscar-winning Aardman Animation to broadcast a set of films over the internet.

Offices in London, Los Angeles and New York are to be closed with the loss of around 120 out of 170 jobs.

All future work for AtomShockwave will be handled out of San Francisco.

A statement from the company laid the blame on the slump in advertising.

"The restructured company will focus on core strengths (advertising/sponsorship and syndication) and continue to service existing partners This change will enable us to solidify and maintain our leadership position in our market category," said the company in the statement.

AtomShockwave, which specialises in animations and short films, had banked on internet broadcasting taking off, but like Icebox.com, Pop.com and Digital Entertainment Network, had struggled to make internet broadcasting pay.