Social Media Bubble Bursting? MySpace lays off 30% of staff
The rumors that MySpace and parent company News Corporation would layoff hundreds of employees became true today. The company is confirming that the current staff will be reduced by nearly 30%. There have been reports of extra security in the MySpace offices today and that the restructuring plan crosses all U.S. divisions of the company and lowers the total number of domestic staff at MySpace to 1,000 employees from 1600.
MySpace, which is owned by Rupert Murdoch’s News Corporation, has been struggling in it’s competition with Facebook’s and the job cuts are an effort to recover some of the buzz that helped MySpace become the world’s most popular social network in 2005. The site’s fortunes have been slipping, as advertising revenues have been decreasing and the company’s $900m ad deal with Google is due to end soon. “MySpace grew too big considering the realities of today’s marketplace,” said Jonathan Miller, News Corp.’s CEO of digital media, “I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward. I am confident in MySpace’s next phase under the leadership of Owen and his team.”
Former Chief Operating Officer at Facebook and now CEO of MySpace, Owen Van Natta, stated “Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company”. Two months ago Van Natta was brought in to replace MySpace co-founder Chris DeWolfe in the company’s top job. Tom Anderson, who also helped start the site, was removed from his job as president as part of the corporate reshuffle orchestrated by Jonathan Miller.
What do you think? In 2000 we had the burst of the .com bubble, in 2006 we had the burst of the housing bubble, is May 2009 going to be the burst of the rapid rise of Social Media?
