While Facebook is growing larger than the population of more than a few countries, MySpace announced Tuesday that it’s laying off nearly 47 percent of its staff. This move, affecting about 500 employees worldwide, is accompanied by the addition of what the company called “strategic local partnerships” in the United Kingdom, Germany and Australia for the management of ad sales and content.
The alliance in the U.K. will be with Fox Networks, with whom MySpace already has a relationship that spans various countries. News Corp., which owns Fox, bought MySpace in 2005 for $580 million. The Australian and German partnerships are still being finalized, the company said.
‘Tough But Necessary’
CEO Mike Jones told reporters that the job cuts were “tough but necessary.” In June 2009, the company laid off 30 percent of its staff, totaling about 420 positions.
Last October, the social network revamped its web site, which, among other things, allowed for management with fewer staff while it focused the site more toward music, celebrity news, and videos. This followed a previous attempt by MySpace to have a larger focus and to compete with industry leader Facebook, which it says it’s no longer trying to do.
At one time, MySpace was considered the top social-networking site, and some industry observers have pointed out that MySpace lost its position at least in part because it didn’t continue to innovate to fend off competition.
Facebook showed earnings of $355 million on revenue of $1.2 billion in the first nine months of 2009. According to some estimates, MySpace’s third-quarter revenue was down 25 percent year over year, and 30 to 40 percent in the fourth quarter.
‘Entertainment Destination for Gen Y’
Jones said MySpace’s recent relaunch “as an entertainment destination for Gen Y” meant it would have “a tighter focus, a significantly streamlined product, and an updated…