MySpace prepares to downsize dramatically

4 Jan 2011

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Social-networking site MySpace is gearing up for layoffs as part of its restructuring.

According to a news release from The Wall Street Journal (WSJ), MySpace, which employs circa 1,100 employees, is preparing to unleash job cuts as soon as this month.

Both MySpace and The WSJ are owned by Rupert Murdoch’s News Corp.

According to the report, the layoffs could amount to between a third and a half of the site’s workforce.

In the summer of 2010, MySpace already downsized by a third, laying off hundreds of employees.

In October, the site revamped its online portfolio to polarise its media assets, restyling its site as a hub for music, entertainment and games.

It subsequently struck a deal with Google, which would see the search engine giant selling search and graphical ads on the site.

According to The WSJ, in the quarter ended 30 September 2010, the News Corp unit that includes MySpace reported an operating loss of US$156m, which was primarily due to the site’s poor performance.

News Corp acquired MySpace in 2005 for US$580m.

Carmel was a long-time reporter with Siliconrepublic.com

editorial@siliconrepublic.com