Former social networking giant MySpace announced today that it would be reducing its workforce in a round of layoffs that will see the company shrink by as much as 47 percent, according to statement made by MySpace CEO Mike Jones.
The company currently employs about 1,000 people and the news comes a year and half after a previous string of layoffs that resulted in a 30% reduction of staff. Rumors circulated recently that NewsCorp was looking for a buyer for the niche social network. Although no official announcement has been made, this news adds credence to the fact that the fledging social network could be picked up by a new owner in the near future.
It’s been a tumultuous few years for the company that is considered to be one of the pioneers of Web 2.0 and once reigned as the king of social media. Founded in 2003, MySpace rose to prominence in a few short years. In 2006 it was reported to be the most popular web site in the United States, overtaking high-traffic web sites like Google and Yahoo Mail in rankings. By mid-2008 however, the new kid in town, Facebook, overtook the now News Corp-run company as one of the most popular web sites on the internet, according to Alexa. Considered a bargain at the time, the $580 million dollar acquisition by the media behemoth did little to stymie competition from up-and-coming Facebook, which would rise to prominence in 2007. By then, the company was already playing catch up to keep up with Facebook’s much more appealing design esthetic and innovative features. Many of these features have now become commonplace, such as status updates and the ability for developers to create third part applications, all of which were lacking with MySpace at the time.
Despite a recent complete overhaul of the sites design to lure back users who have flocked to Facebook in recent years, MySpace hasn’t been able to regain the market share that it once held. As popularity of MySpace as a mass appeal social network has waned, the company has by and large happily redefined itself as a niche social network focused instead on appealing to music and digital media fans. It still remains a popular destination for musicians and bands to share and stream music because of its still very strong 66 million user base.
With this announcement Jones maintains that the company still has legs and that the move to reduce its workforce has largely to do with trimming excess fat rather than a reflection of the performance of a product. The CEO was quick to point out the fact that since the role out of the new design, over 3 million new profiles were created on MySpace and mobile use of its site has risen in recent months. And with 43 million unique monthly visitors (65% of the sites total users), its quite clear MySpace isn’t going away anytime soon.