MySpace to axe 300 staff globally
23 Jun 2009
MySpace, the social networking Web site owned by Rupert Murdoch's News Corp, said today that it will prune its international work force by two-thirds and close at least four offices outside the US.
In order to bring in greater efficiency under MySpace CEO Owen Van Natta, the company plans to axe about 300 overseas jobs and close four offices outside the US after it axed 420 staff in the US last week, bringing the total number of MySpace's US staff to 1,000.
Acording to the latest comScore data rival Facebook, which has lagged MySpace in the US, despite leading globally, has matched or overtaken MySpace in the US in terms of number of visitors. (See: Facebook overruns MySpace in US)
Under the proposed plan, MySpace would place all existing offices in Argentina, Brazil, Canada, France, India, Italy, Mexico, Russia, Sweden, and Spain under review for possible restructure.
MySpace China, which is locally owned, operated, and managed company, and MySpace joint venture in Japan would not be affected by the proposed plan, said the company in a statement.
Upon completion of the proposed plan, London, Berlin, and Sydney would become the primary regional hubs for MySpace's international operations.
With nearly half the employees at MySpace being laid off, the company said in a press release, "restructuring steps we have taken have laid the groundwork for an exciting new chapter of innovation for MySpace"
Van Natta said in an e-mail to employees, ''Our goal to tap into as many international markets as possible drove us to create too many offices around the globe, and with them came inefficiencies. Under the new plan, we will refocus our efforts on regional business partnerships and integration in a smaller number of territories, while retaining a robust international presence. We remain steadfast in our commitment to reaching a global audience.''
The move, the second cost-cutting effort at the site, comes less than two months after MySpace hired former Facebook executive Van Natta, 39, as its new chief executive, who had said, "Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company."
MySpace, facing tough competition from Facebook since its rival overtook MySpace in the US in terms of number of visitors. While Facebook has been globally more popular, MySpace had so far been on top in America.
MySpace's base has stagnated at about 125 million worldwide users, while Facebook said its usage has doubled to more than 200 million in less than a year. Until now, MySpace still had the edge among US users, but now the comScore figures show that in May, MySpace and Facebook both had about 70 million users apiece in the US.
The earlier job cuts follow the departure of MySpace co-founder Chris DeWolfe as chief executive officer in April. Co-founder Tom Anderson, who is every account holder's first friend and acts as its glitch fixer, is also in ongoing talks about taking the creative product role away from his day-to-day responsibilities.
