14 DAY TRIAL // Earlier this week, MySpace announced that it would lay off several hundreds of employees in the US, confirming speculation. Now, according to TechCrunch, the social networking company plans to do the same for its international outlets although how, when and how many will be let go hasn't been decided yet.
MySpace isn't the hot property it once was and the ones in charge of it definitely know that. Its biggest rival, Facebook, passed it to become the largest social networking site in the world last year and recently in the US, MySpace's last stronghold.
Furthermore, while Facebook saw user numbers skyrocket, MySpace's page views dwindled in the previous year and the trend shows no sign of reversing. And it's not just the users that are leaving MySpace behind, the media is doing it also with Facebook, not to mention Twitter, becoming the social media darling of the Silicon Valley and the mainstream press.
Financially speaking, things are going so well either as the Google ad deal that brought the social network hundreds of millions in yearly revenue is not being renewed as the search giant is less than pleased with their side of the arrangement. And while the deal made MySpace executives very happy, the users were less than pleased with the disruptive changes to the user experience. Needless to say, it has to find new revenue streams or cut costs, and fast. In fact, that's exactly what it's doing.
Just this week, MySpace announced it would trim its US workforce of 1,600 employees to about 1,000, hoping to return to a “startup culture.” The company didn't mention anything about its 30 international offices, six of which are in Europe but the signs from its headquarters in London point to a similar announcement coming soon. It isn't clear what European outlets will make the cut and speculations are that only the London and German offices will survive. Europe's tougher laws concerning employee protection may be to blame for the delayed announcement but the move is most likely in the making.