MySpace Announces Massive Layoffs

Dennis Faas's picture

A day after Facebook denied rumors that it would be shutting down permanently March 15, 2011, it appears social networking rival MySpace may actually be headed towards oblivion. The company recently announced it will lay off nearly half of its current workforce.

The 2010 movie "The Social Network" chronicles Facebook's rise from dorm room novelty to global phenomenon. If you didn't know better, you'd think Facebook CEO Mark Zuckerberg started the whole social networking phenomenon.

But before Facebook there was MySpace, which was drawing hundreds of thousands of members long before Zuckerberg ditched Harvard University. The site allowed community members to create their own personalized page, giving them the power to add music, visual designs, and lots of pictures. In many ways, it allowed those who joined a lot more creative freedom than Facebook has ever offered.

MySpace: Not the First Round of Layoffs

Unfortunately, lots of MySpace pages were loud, annoying and visually disorienting to look at. Facebook's cookie-cutter templates for member pages gave that site a much cleaner feel. For that, and a variety of other reasons (better marketing on the part of Facebook brass), MySpace's piece of the social networking pie has been steadily eaten away in recent years.

As a result, in 2009 MySpace made the difficult decision to cut 30 per cent of its total staff, blaming "the realities of today's marketplace." It seems things haven't improved over the last year-and-a-half, however, as MySpace this week announced it would cut an additional 500 employees, representing approximately 47 per cent of the company's total workforce. (Source:

New MySpace Design Layout

In an attempt to win back members, MySpace has redesigned their product considerably in the last year. MySpace CEO Mike Jones insists that these changes aren't behind the layoffs, saying that they are "purely driven by issues related to our legacy business, and in no way reflect[s] the performance of the new product."

Jones insists that the redesign has actually increased traffic to the site, claiming that about 3.3 million new accounts have been created since its introduction.

MySpace "Losing Money Consistently"

Nonetheless, layoffs are never a good sign. Analysts report that MySpace, which was bought by News Corp. in 2005 for $580 million, "has been losing money consistently." (Source:

With Facebook not long ago reporting that its membership had eclipsed half a billion people, MySpace's 130 million active users just doesn't seem all that impressive anymore.

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