• GigaOm, Wednesday, October 5, 2011 11:48 AM

Think Rhapsody's purchase of Napster (from Best Buy) spelled a new beginning for the music streaming service? Think of it more like a "glorified funeral," GigaOm suggests on rumors of massive layoffs coming next month. Napster's two offices in Los Angeles and San Diego will close, leaving an estimated 120 employees out of a job, sources tell GigOm. "A few may get rehired by Rhapsody, but I wouldn't get my hopes up."

A Rhapsody spokesperson apparently confirmed the impending layoffs, but offered few additional details. So, what did Rhapsody's get from Napster? At most, "a few hundred thousand new subscribers -- even though it's unclear how many will actually stay around -- and the company may even get a few interesting patents as a sugar coating," GigaOm guesses.
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Rhapsody didn't actually pay any cash for Napster's assets, but it did up a minority share in its company. Rhapsody President Jon Irving just recently confirmed that it was an "all-equity deal."

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