MySpace formally announced its layoffs today, stating that it would dismiss 500 of the company’s over 1000 employees, or about 47% of its total workforce. Most of the layoffs, as expected, are coming from MySpace’s international divisions. The US is now the only country where MySpace will manage its own ad sales. The layoffs come despite statements from MySpace CEO Mike Jones that over 3.3 million new user profiles have been created since the site launched its latest redesign, with MySpace now serving 22 million mobile users.
“In international, Myspace, Inc. will be entering into strategic local partnerships in the UK, Germany and Australia to manage advertising sales and content. In the UK, 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,” said Jones, in a press statement.
This is the second major round of layoffs for MySpace in the past 18 months. In June 2009, then-CEO Owen Van Natta announced that MySpace would cut 30% of its staff. At the time of the 2009 layoffs, Van Natta said that MySpace’s staffing levels were “bloated.” Van Natta shrank MySpace from roughly 1420 employees to around 1000. Today’s round of layoffs leaves MySpace with about 560 employees. The language of Jones’s press statement today echoes what Van Natta, now an executive at Zynga, said about MySpace last summer.
“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,” said Jones.
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