This is the second round of major job cuts for MySpace. In June 2009, the company cut 30 percent of its workforce. The layoffs then shrunk the site's workforce from nearly 1,420 to 1,000. Today's cuts bring the staff count to roughly 560.
MySpace has been on a steady decline in terms of revenue, mindshare, and traffic. It's even considered one of the slowest social networks. It seems as Facebook grows, MySpace falters. This is despite a recent redesign, a new mobile site, and even a desperate attempt to cling to Facebook for help.
News Corp bought MySpace for $580 million in 2005. Initially, the deal paid for itself after Google inked a three-year $900 million search advertising deal the following year. Ever since though, MySpace has become less and less relevant as a social network.
Here's the full statement for the most recent cuts, attributed to MySpace CEO Mike Jones:
Today Myspace is implementing a significant organizational restructuring that will result in a 47 percent staff reduction across all divisions globally and impact about 500 employees. With our recent relaunch as an entertainment destination for Gen Y, we introduced a much tighter focus, a significantly streamlined product and an updated technology platform.
In international, Myspace, Inc. will be entering into strategic local partnerships in the UK, Germany and Australia to manage advertising sales and content. In the UK, Myspace will enter into a strategic alliance with .Fox Networks, with whom we have successfully partnered with in many international territories. Details about Australia and Germany are currently being finalized. Myspace will retain a core, dedicated international team to work with partners in order to ensure users, content partners and advertisers continue to be served.
Today’s tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability. These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product. The new organizational structure will enable us to move more nimbly, develop products more quickly, and attain more flexibility on the financial side. We are also committed to rebuilding the company with an entrepreneurial culture and an emphasis on technical innovation.
While it’s still early days, the new Myspace is trending positively and the good news is we have already seen an uptick in returning and new users. Since the worldwide rollout of the new Myspace, there have been more than 3.3 million new Profiles created. We also introduced Topic Pages, which connect users to entertainment-focused content from news sites and blogs all over the Web. Over 134,000 Topic Pages have been created since the introduction of the new Myspace. There has also been a boost in viral activities, with over 10 million social actions and 90 million “follows” within the Hubs and Topics categories. In addition, we are seeing Curators driving a lot of the engagement on our site. Users who “friend” one of our Curators increased their frequency of visits by 35 percent. Lastly, we have already seen a rise of four percent in mobile users just between November to December, now totaling over 22 million.