Report: MySpace to cut half of its staff this week

Report: MySpace to cut half of its staff this week

Summary: MySpace - once the site that was synonymous with online social networking - is expected to shed more than half of its staff tomorrow, another sign that the end is near.Liz Gannes over at All Things D cites several sources who tell her that the company will lay off 550-600 of the 1,000 remaining staffers as early as tomorrow.

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MySpace - once the site that was synonymous with online social networking - is expected to shed more than half of its staff tomorrow, another sign that the end is near.

Liz Gannes over at All Things D cites several sources who tell her that the company will lay off 550-600 of the 1,000 remaining staffers as early as tomorrow. Around the water cooler, however, this isn't coming as much of a surprise.

Back in November, parent company News Corp. talked about a a new look and a relaunch for the site but cautiously said that the company would be judged on a quarterly basis as the parent company searched for short-term results.

News Corp. is a big company and manages many online properties, including All Things D. MySpace falls into the "other" category, one that delivered an operating loss of $156 million on revenue of $298 million in its fiscal first quarter. A year earlier, MySpace had a loss of $126 million on revenue of $400 million.

At the time, News Corp.'s Chase Carey said:

We have been clear that MySpace is a problem. We recognize that we had to redefine and largely rebuild this business. We believe the foundation was there to warrant this effort and it has been our focus this year... We equally know we need to make real head way in the coming quarters to get this business to a sustainable level. Overall, when you have as many businesses and as many regions as we, do it is unlikely that they will all be operating at an optimum level on a short-term basis although we strive to make sure most are.

Gannes also suggested that MySpace will start looking for a buyer after the layoffs. While the company is primarily being shopped to private-equity buyers, she wrote, one possibility being floated around is that Yahoo is being eyed as a possible buyer.

Yahoo may also need some help these days, too, but swooping up MySpace - which has seen its social networking crown shifted to Facebook - probably isn't the best chess move.

Topics: Social Enterprise, CXO, Collaboration, IT Employment

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7 comments
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  • I'm sorry to say this, but it's their own fault

    It happened to Yahoo. It happened to AOL. It's happened to so many other "leaders" in the internet business.<br><br>Get on top. Get fat. Get arrogant. Get lazy. Get behind. Get squashed.<br><br>Once they get behind and somebody else passes them up, there is no hope that "re-invention" will save them. This business is based on perception and fads, not on technical abilities or cost-competitiveness. Once a company has lost their edge in people's minds, they will never get it back. It's a cautionary tale for the likes of Twitter, Google, and even Facebook. There will always be somebody in the wings that can come in and eat your lunch in a flash.
    terry flores
    • RE: Report: MySpace to cut half of its staff this week

      @terry flores Keep in mind that, unlike the other services you mention, Myspace has always sucked, and their redesign made it even worse than it's ever been. I honestly don't have anything positive to say about them. I never understood why people were so crazy about it.
      MikeR666
    • Agreed. MySpace could have prevented this.

      Not only did they fail to innovate, but they failed to see the competition coming up fast in their rear view mirror.<br><br>Their market was up-and-coming indie musicians and lots of teens with horribly gaudy personal pages. As those teens grew into adults, their tastes matured and they began to appreciate the streamlined efficiency of Facebook (relative to MySpace). New teens emerged and wanted to be where everyone else was, so they chose Facebook too. The rest is history.<br><br>MySpace was counting on some sort of natural market segmentation or gentlemen's agreement for Facebook not to wholly take their market. That was foolish. Oh, and serving up ads rife with viruses and trojans didn't do anything to help them either.
      the.ksmm
  • RE: Report: MySpace to cut half of its staff this week

    Now if only Facebook would just die-off as well!
    james347
    • RE: Report: MySpace to cut half of its staff this week

      @james347 :
      My exact thoughts - Die Facebook! Admittedly I've never "been there, done that ...." on MySpace, Twitter or Facebook but I'm just amazed/disgusted how the teenie-boppers and tweenies waste their (alleged) brains on such foolishness. Their parents spend $10K's per year on private schools so they can do this..........? Pfffft.
      BMaytum
  • RE: Report: MySpace to cut half of its staff this week

    News like this causes marketers to pause, especially because of phrases like this: "MySpace - once the site that was synonymous with online social networking." Not only does it show how quickly this space moves (and requires marketers to move), but it also shows how important it is to stay flexible. The hot social networking trend today might not be the same tomorrow. Having plans and tools in place that let you stay both current and maneuverable - no matter what the future holds for social media marketing - is key.

    Jason Weaver
    CEO, Shoutlet
    jasonweaver
  • RE: Report: MySpace to cut half of its staff this week

    Recently had major hassles, old email address (to which myspace account was linked) became inaccessible, lost passwords etc. myspace so far after three attempts has failed to help me regain access to my account. Proved I am who I say I am several times, and still they ignore. I am really not surprised they are floundering. This prior user is not surprised given the poor customer support received recently!
    richardhx