The News Corp owned Myspace social networking website could soon lay off as many as half of their employees, the Wall Street Journal (WSJ) reported on Monday.
WSJ reporters Jessica E. Vascellaro and Russell Adams, citing sources familiar with the matter, say that the California-based website could be cutting between one-third and one-half of their 1,100 employees in what they refer to as a “dramatic downsizing of its business.” The cuts could even come before the end of the month, according to their sources.
“The restructuring is the latest step in Myspace’s intensifying turnaround effort,” Adams and Vascellaro said in their report. “The social network reduced its staff by nearly 30% last summer, laying-off hundreds of employees. But the cuts weren’t sufficient to contain costs, a person familiar with the matter said, who added the new cuts would be across the board.”
“Another person familiar with the matter said that, depending on the results of the restructuring, News Corp. may look for buyers for Myspace but there are no current talks over a sale,” the WSJ reporters added.
Myspace was acquired by News Corp, the parent company of Fox Television, for $580 million in 2005. Since then, they have been unable to keep up with social networking competitors, including the uber-popular Facebook.
In November of last year, Vascellaro and Adams say that Facebook attracted more than 150 million unique visitors in the US alone. Myspace’s traffic was slightly over one-third of that, and marked a 15% decrease from a year ago while Facebook enjoyed a 50% increase over that same time period.
According to Jemima Kiss of the Guardian, News Corp COO Chase Carey “signaled the beginning of the end for MySpace during an earnings call in October when he said the site’s losses were ‘not acceptable or sustainable’ … He also told the Reuters Global Media Summit in November: ‘There are opportunities here to do 20 things, but that doesn’t mean you’re going to do any of the 20. If there’s something there that makes sense you ought to think about it.'”