MySpace axes more workers

Jun 24, 2009
Euan Stuart

The social networking site plans to slash two-thirds of its worldwide employees outside the US

MySpace has announced plans to cut its international employees by two-thirds, just a week after saying it would cut a third of its US workforce. The move will see it reduce its headcount outside the US by 300 to 150 as well as close four offices, and comes as it suffers from intense competition from Facebook, which is seeing much faster levels of user growth.

The group – owned by Rupert Murdoch’s News Corporation - has offices in Spain and Sweden and further afield in India, Russia and South America, all of which are now under threat. Half of MySpace users come from outside the US.

Chief executive Owen Van Natta said: "As we conducted our review of the company, it was clear that internationally, just as in the U.S., MySpace's staffing had become too big and cumbersome to be sustainable in current market conditions." The company now plans for its offices in London, Berlin and Sydney to become its primary international hubs.

In addition to competition from sites like Facebook and Twitter, MySpace has also had to contend with slowing advertising as the global economy contracts. Revenues from advertising are expected to fall 15 per cent this year and there will be another hit to profits when the company's current deal with Google ends next year.


Karin Von Abrams, analyst at research firm eMarketer, in the New York Times: "Facebook seems to have been better at opening up its appeal to more age groups, in more markets. Once the momentum begins to build for one site, there’s a kind of self-fulfilling prophecy to it."

Ian Paul in PC World: "While MySpace’s fortunes do not look good, it could still live on as a popular hub for music pages – one of MySpace’s strengths. I doubt MySpace will suffer a Friendster-like fall, but its days as a centre of activity for personal users could be over."

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