Following months of rumors and
speculation, MySpace on Tuesday announced plans to cut nearly half of its remaining workforce. The "significant organizational restructuring," said CEO Mike Jones, "will result in a 47 percent staff
reduction across all divisions globally and impact about 500 employees." As many predicted, the once high-flying social network is couching the layoffs as part of a strategy to reposition itself for
growth.
"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," Jones said.
Regarding the company's
recent redesign, Jones added: "These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product."
On a positive note, since
the rollout of the new MySpace late last year, there have been more than 3.3 million new profiles created, according to Jones. Not mentioned, however, was how many users deserted the site during the
same time frame, nor how the relative growth measures up to previous months and years. Meanwhile, Jones added "we have already seen a rise of four percent in mobile users just between November and
December, now totaling over 22 million." What's more, "while it's still early days, the new MySpace is trending positively and the good news is we have already seen an uptick in returning and new
users," Jones said.
MySpace's recently launched Topic Pages, which connects users to entertainment-focused content from news sites, also seem to be gaining traction among users. Over 134,000
topic pages have been created since the introduction of the new MySpace.
There has also been a boost in viral activities, with over 10 million social actions and 90 million "follows" within
the Hubs and Topics categories.
MySpace also claims to be seeing "Curators" driving significant engagement. Users who "friend" one of its Curators increased their frequency of visits by 35%.
Still, such progress pales in comparison to figures presently being put up by Facebook, and is largely seen as an effort by MySpace to attract potential suitors.
Late last year, News Corp.
Chief Operating Officer Chase Carey said MySpace's days were numbered unless the unit could mount a serious turnaround.
MySpace averaged 57.5 million U.S. visitors in September -- 24% fewer
monthly visitors than its peak of 75.9 million in December 2008, according to ComScore. Partly as a result, the site lost about $350 million last year, RBC Capital Markets analyst David Bank estimated
recently.
MySpace on Tuesday also announced plans to enter into strategic local partnerships in the UK, Germany and Australia to manage advertising sales and content. In the UK, MySpace will
enter into a strategic alliance with .Fox Networks, with whom it has already partnered with in many international territories. Details about Australia and Germany are currently being finalized, while
MySpace said it plans to retain a core, dedicated international team to work with partners.