Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

MySpace slashes its staff in half

By Laurie Segall, staff reporter


NEW YORK (CNNMoney.com) -- MySpace said Tuesday that it is laying off 500 employees, cutting its staff by 47%.

"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," CEO Mike Jones said in a written statement. "These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product."

The company announced the long-rumored staff chop at the exact moment most of the tech world's attention was riveted elsewhere, on Verizon's hotly anticipated announcement that it will soon begin selling Apple's iPhone.

MySpace's management kept most of the site's developers but gutted nearly every other job role, according to a staffer who survived the cuts.

Once king of the social networking world, seven-year-old MySpace has fallen behind younger and nimbler rival Facebook. Acquired by News Corp. (NWS, Fortune 500) in 2005 for $580 million in cash, the site's active user base now hovers around 130 million -- far short of Facebook's 500 million.

Trying to reposition itself, the Los Angeles-based network recently rolled out a new interface focusing on music and social entertainment.

It also unveiled a Facebook link that allows MySpace users to integrate their profile data and log in through Facebook -- a move some took as a sign that MySpace is waving the white flag.

Jones tried to quash those rumors in his announcement of the company's deep layoffs.

"While it's still early days, the new MySpace is trending positively and the good news is we have already seen an uptick in returning and new users," he wrote.

But in a recent interview with Fortune, Jones acknowledged the sharp challenges the company faces in trying to rebuild.

"My belief is that MySpace got very, very diverse in its offering, and didn't really have a specialized service that users understood," he said. "As we broadened our service over time, I think we lost some of the core strategic functions that MySpace offered early on that delighted its customers."  To top of page

Index Last Change % Change
Dow 24,651.74 143.08 0.58%
Nasdaq 6,936.58 80.06 1.17%
S&P 500 2,675.81 23.80 0.90%
Treasuries 2.36 0.01 0.38%
Data as of 4:57pm ET
Company Price Change % Change
Bank of America Corp... 29.04 0.31 1.08%
General Electric Co 17.82 0.18 1.02%
Oracle Corp 48.30 -1.89 -3.77%
Micron Technology In... 42.40 0.16 0.38%
Microsoft Corp 86.85 2.16 2.55%
Data as of Dec 15
Sponsors

Sections

More than 5% of DACA recipients have started their own businesses since enrolling the program, according to a recent survey. More

Republicans said their plan would make taxes easy to prepare, and indeed the final bill gets points for some simplification. But the whole story, like the tax code, is more complex. More

Uber is being sued by Waymo, Alphabet's self-driving car unit that was formerly part of Google. Waymo alleges that Uber stole trade secrets about its self-driving technology. More

Homeowners would be able to deduct interest on the first $750,000 of a new mortgage under the final tax bill -- down from the current $1 million threshold. More