Myspace has planned to layoff one-third to half of its employees for the curtailment of its business expenditures. According to the people familiar with the matter, the plan is expected to be announced in this month. It is the latest move by the social network in its turnaround effort.
Last summer, New Corp.’s Myspace reduced 30 % of its staff. Unfortunately, the lay-offs were insufficient to downsize the costs. The people familiar with the matter said that the new lay-offs would be in all departments. The company may even look for buying based on the outcome of the restructuring, though there are no talks over a sale as yet.
The spokeswoman for Myspace at Beverly Hills, California declined to comment.
Myspace Plans to Layoff Employees
In October, Myspace had redesigned the website to accentuate its media assets. It later also came up with a new ad deal with Google Inc. Under which Google had to sell search and graphical ads on the site. People familiar with the deal reported that it generates too less revenue compared to the one generated by the last deal. Myspace restructured the website to make it games, music and entertainment hub.
New Corp. had acquired Myspace for $580 million in 2005. Since then it has struggled to remain relevant as Facebook grew much faster. According to comScore, Myspace U.S. visitors have reduced by 15% in a year. The research firm, eMarketer stated that ad spending on Myspace has also reduced by 37% last year. On the other hand, the U.S. visitors of Facebook have increased by 50%.
New Corp. reported a loss of $156 million due to the site in the quarter ended September 30.
Chase Cary, News Corp. Chief Operating Officer, in November, on a conference call with analysts said, “Our management did not create the losses, but they know how to address them.”
He later, at the industry conference, said that the relaunch that pleased the media conglomerate, was key to keeping the option for the site open for the firm.