MySpace to Slash Half of Employees, Yahoo Buyout Mulled

More bad news at MySpace, the company is getting another massive round of layoffs, to be announced tomorrow. Already, many of the social network's employees, especially overseas, have been cut in the last couple of years. MySpace is now expected to shed some 550 to 600 employees, out of an 1,000 total. Again, the foreign offices will be hit the hardest.

AllThingsD reports, citing several sources close to MySpace, that the down-on-its-luck social network is now putting the finishing touches, pinning down the actual number of employees being let go tomorrow.

Apparently, MySpace is adjusting to its new focus on entertainment and is getting rid of people that it no longer needs as the social components of the site get de-emphasized.

MySpace has been undergoing a major transformation, culminating with the massive redesign it introduced in autumn. The new look and focus of the site would position it as a media hub, a place to access new content and follow celebrities or bands.

The fresh new coat of paint helps MySpace at least look like it's putting up a fight. But, as speculated when the redesign was first introduced, it may be nothing less than just a sprucing up as News Corp prepares to sell its major online venture.

In fact, the social network is already being showcased to private equity firms which may want to take over the ailing, but still large site. A very interesting option, which is being considered apparently, would be to sell MySpace to Yahoo, a company that hasn't managed to make much inroad in the social space itself and has now mostly given up on efforts.

A Yahoo buyout would certainly be surprising and perhaps interesting in the long run, but Yahoo has too many problems of its own to take on MySpace's. Just like with the rumored AOL - Yahoo merger, sticking two problem companies together doesn't magically fix anything, most likely it only amplifies the issues.

That said, Yahoo's might, though dropping, is still considerable and, with its help and expertise in media and content creation, the revamped MySpace could certainly generate quite a lot of traffic and perhaps even grow for the first time in the last couple of years.