Major Layoffs Expected at Myspace

But some employees are happy to flee the sinking ship

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More bad news out of Myspace. The once hot social networking site is expected to lay off around 150 of its 400 employees on Wednesday—nearly 40 percent of its total staff—according to rumors confirmed by a TechCrunch source. The source also said that “another group of around 150 employees will be put on a transition plan, where they will still be laid off but can work with pay for a few weeks while they search for another job.”

But some of the company’s employees actually seem happy about the news. “Apparently everyone is expecting it and actually hoping for it,” a former Myspace staffer with friends at the company told Gawker about the job cuts. “I think the management owes the employees severance because of the terrible management mistakes they presided over.”

Last January, the site cut around 47 percent of its employees—about 500 people total. The new round of layoffs comes just in time for Myspace to announce a deal for its sale, which TechCrunch says will likely be signed tomorrow and announced formally on Friday. Who’s actually buying the company is still unknown, but some of the rumored bidders include Buzzmedia, LivingSocial, and a group fronted by Activision CEO Bobby Kotick, which seems to be the front-runner.

The company has experienced a steep fall from its heyday as the top of the social networking pile. Back in 2008, Myspace made more than $604 million in global advertising revenue, according to data from eMarketer. But by 2010, that number had dropped to $287 million, and eMarketer estimates that the site's ad revenue will continue to decline in 2011, falling by 36.3 percent to just $183.5 million.

@adweekemma Emma Bazilian is Adweek's features editor.