Once a social networking behemoth, News Corp.-owned MySpace's rapid descent up against competition like Facebook and Twitter may soon lead to mass layoffs.
The Wall Street Journal, itself operated by a division of News Corp., reported today that MySpace is preparing "a dramatic downsizing of its business." Someone familiar with the matter told WSJ that a third to a half of its 1,100 employees could be let go and another source said the layoffs could be officially announced as soon as this month.
Rumblings of MySpace layoffs were first reported by All Things Digital, also News Corp.-operated, on New Year's Eve, just days ago.
Home to more than 80 million visitors per month in the summer of 2007, its audience has dwindled to under 40 million visitors per month in the past year, according to Quantcast.
In an effort to stay relevant, MySpace has aggressively sought to rebrand itself as an entertainment hub and deepened its relationship with Facebook with a stronger integration between the sites last month. The MySpace logo was redesigned in October, when the site also underwent a significant redesign.
In an earnings call in October, Chief Operating Officer Chase Carey stated that MySpace's losses were not "acceptable or sustainable." Nearly the entire MySpace staff had off the last week of December in an apparent cost-cutting measure, which the company denied, stating it was "an employee perk."