Cryspace: Myspace Confirms Speculation of Some 500 Layoffs

Myspace's October launch of a redesigned Web site and shifting of its focus to entertainment apparently wasn't entertaining enough in the handful of weeks since it went live, as the News Corp.-owned social-networking site confirmed speculation that it would lay off 500 employees, or roughly one-half of its staff. While News Corp. claims that it the moves were made "in order to provide the company with a clear path for sustained growth and profitability," they could also be interpreted as making Myspace leaner in hopes of a potential sale. The statement from 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 United Kingdom, Germany, and Australia to manage advertising sales and content. In the United Kingdom, 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 that 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. More than 134,000 topic pages have been created since the introduction of the new Myspace. There has also been a boost in viral activities, with more than 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 4 percent in mobile users just between November to December, now totaling more than 22 million.

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Cryspace: Myspace Confirms Speculation of Some 500 Layoffs

David Cohen

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