MySpace cuts a third of US staff

LONDON - MySpace laid off 420 employees in its US offices yesterday with more cuts in its international divisions and other News Corp Fox Interactive Media (Fim) properties expected to come.

The cuts, making up about a third of its staff, had been rumoured for a number of weeks and affect all divisions of the company.

MySpace CEO Owen Van Natta said the layoffs will help it "operate as a nimble and entrepreneurial company with the adaptive mentality of a start-up".

Van Natta said: "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company.

"I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace.

"Our intent is to return to an environment of innovation that is centred on our user and our product."

The cuts follow news that MySpace has been passed by Facebook as the most popular social network in the US, a title it has held for several years.

MySpace's web traffic has declined significantly in 2009, losing about 700,000 page visits in May alone.

Owen Van Natta was brought in as MySpace's new CEO in April following a managerial shake-up at News Corp, which also saw AOL CEO Jonathan Miller appointed as CEO of digital media.

Miller will oversee News Corp's digital portfolio FIM, which includes MySpace.

Miller said: "MySpace grew too big considering the realities of today's marketplace.

"I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward."

Layoffs are also expected at Fim, which also includes Photobucket, Fox Sports Interactive, Rotten Tomatoes, IGN and AskMen.

A Fim spokesman said: "In conjunction with the MySpace staff cuts this week, we reduced our corporate Fim staff and also assigned certain positions to specific business units.

"These moves will allow the business leader at each of our sites to operate in a more streamlined environment and have more direct responsibility for their teams."

More cuts are expected in MySpace's 23 international offices, which include London, Paris, Berlin, Sydney, Mexico City, Sao Palo and Tokyo, where it has historically performed poorly against localised social networks, such as Mixi in Japan or hi5 across Asia and Latin America.

On the other hand, Facebook has steadily gained users in international markets and was named as the world's most popular social network about a year ago, with an estimated worth of $10bn.