A year ago MySpace and Fox Interactive Media were trumpeting an upcoming office move to Playa Vista in Los Angeles. Peter Levinsohn (former) President of the no longer existing Fox Interactive Media, justified the move to the 300,000 square foot space based on the “phenomenal success” of the business, and noted that he expected “even greater growth and achievements in the coming fiscal year.”
FIM has experienced phenomenal success in its three-year history, and we have plans for even greater growth and achievements in the coming fiscal year. Given our tremendous track record, it’s only fitting that we should enter into the single biggest real-estate transaction in Los Angeles in the last 25 years. When we move to our new facility between June of 2009 and January of 2010, not only will we enjoy the distinction of having one of the largest corporate headquarters in the LA area, but we will be housed in a state-of-the-art facility that reflects our corporate identity and culture.
Fast forward through that next fiscal year and just about everything in Levinsohn’s email worked out exactly differently. Peter’s gone. FIM is dissolved. MySpace CEO Chris DeWolfe was terminated. And MySpace is facing dramatic traffic declines and the prospect of a world without Google welfare payments.
Time to cut costs. And people cuts alone won’t do the trick. Levinsohn said “Given our tremendous track record, it’s only fitting that we should enter into the single biggest real-estate transaction in Los Angeles in the last 25 years.” Now new digital chief Jonathan Miller, who has probably noted that with all the layoffs MySpace doesn’t really need all that hip new square footage, is saying they’re backing out of that transaction. In an email to all MySpace employees, Miller said:
Since coming on board, it’s no secret that I have asked each of the executive teams within my organization to conduct a comprehensive strategic review of their businesses to ensure that we are operating as efficiently and effectively as possible. These reviews have included a very close look at our costs and a full examination of our resource allocation – an important exercise that will help us determine whether our resources are aligned properly with our business priorities. This process is still ongoing and we will be communicating the details of the reviews as the results become available.
One immediate result is that we have determined that we will not be moving to Playa Vista. After taking many different factors into account, we have decided that the best plan for our businesses is to remain in our current locations for the near future. We’re making great progress building strong standalone businesses at each of our LA locations, and the last thing we want to do is to interfere with that momentum. In addition, the realities of the current economy make the prospects of a move incredibly expensive, a fact that I believe makes this decision not only good for our working environments, but also for
our bottom line.
As I mentioned above, the strategic reviews are ongoing and I assure you that our executive teams are working as quickly as possible to determine what, if any, additional decisions will be made and we will communicate with all of you as frequently as possible in this regard.
It’s funny how MySpace PR fell all over themselves to get the word out on the new office space last year, but not a word on pulling out now. We hear the San Francisco office is next to go.