• The Wall Street Journal, Tuesday, January 27, 2009 11:30 AM

Fox Interactive Media, the News Corp. division that houses MySpace, is laying off 5% of its workforce, or about 100 people, The Wall Street Journal reports. According to an unnamed source, the layoffs include all FIM units. The cuts began last month. "I can confirm that several of the groups within FIM are eliminating some jobs and repurposing others," a FIM spokesman said in a statement. "This is part of a larger effort we're making to put FIM in the best possible position to succeed now and, more importantly, to emerge even stronger once the markets recover. It's important to note that we continue to hire in many areas."

So much for the Web being above the broader economy. Indeed, the Journal points out that News Corp. will be under pressure to show strong earnings from FIM when it reports quarterly profits next week. The economic downturn has already put pressure on the division's advertising growth. In the third quarter, FIM reported a revenue increase of 17%, down from 23% in the second quarter.

In response to the rather bearish Journal report, MySpace issued the following statement: "We are constantly aligning our business and resources to focus on the core strategic initiatives of MySpace. We currently have open positions, are actively hiring in areas including but not limited to MySpace Music, Business Development, and other product initiatives. We expect to have more MySpace employees at the end of this fiscal year than we currently have."

Read the whole story at The Wall Street Journal »