MySpace is about to have a major wave of layoffs, according to multiple sources close to the company. One source describes the number of people affected as “massive”, while another source says that the layoffs will likely affect between 300 and 500 employees. It’s unclear if these numbers apply to MySpace alone or its parent company Fox Interactive Media, but MySpace makes up around 1600 of the 2900 employees in FIM, so it’s likely that the social network will be hit hard.
Last summer MySpace let go of 5% of its staff, and as many as 45 employees were laid off last month. These cuts go far deeper. We’ve heard that the company’s legal team is hammering out the paperwork that will need to be submitted to the state of California under the WARN act, which requires large companies to give advance notice of any major layoffs. We’ve contacted the California Employment Development Department, which has yet to receive the filing, but we hear they should be getting it any day now.
Contacted for comment, a Fox Interactive Media spokesperson issued the following statement:
“Like any company with new leadership, Fox Interactive Media is reviewing every aspect of our operations, performance and structure. It’s no secret that we are looking for ways to improve our products, increase the value of our digital assets, and enhance the overall financial strength of the company.”
Since former AOL chief Jonathan Miller took over as News Corp’s CEO Digital Media and the MySpace executive team shakeup in April, MySpace and FIM have undergone extensive measures to cut costs, including these personnel hits. FIM also just backed out of its plans to take over its new Playa Vista offices.
Why the cuts? MySpace traffic is plummeting, and revenue is going to take a huge hit when the Google deal terminates in mid 2010. MySpace already has an uphill battle on its hands as it vies to compete with Facebook, and it’s no longer going to have that very lucrative revenue stream to lean on.