MySpace Lays Off Half its Staff, May Look to be Sold

In an effort to cut costs and streamline its new business model, struggling social networking site MySpace (News - Alert) on Tuesday laid off about half of its global staff.

The widely-expected move comes on the heels of a complete restructuring that changed the company's focus away from being a holistic social networking site like Facebook (News - Alert). For the last three months, MySpace has acted as an entertainment portal for a younger audience, giving them the ability to consume and share music, videos and celebrity gossip, according to the AP.  

Mike Jones, chief executive officer at MySpace, indicated that the company's new structure will allow it to become more flexible and bring new products to market in a more efficient fashion.

"These changes were purely driven by issues related to our legacy business and in no way reflect the performance of the new MySpace," he said in a statement. "We are also committed to rebuilding the company with an entrepreneurial culture and an emphasis on technical innovation."

Smith added that MySpace has been "trending positively" lately and has experienced a rise in the number people who have signed up for the service over the last few months. He noted that more than 3.3 million new profiles have been created since the new site was launched in October. In November and December alone, the site saw a 4 percent uptick in the number of active mobile users.

While Smith's statement reads with a positive tone, many news sources have speculated that the site's owner, News Corp., is looking to build MySpace up so that it can sell it off in the near future. All Things Digital (News - Alert), a technology blog also owned by News Corp., reported yesterday that the company will put the site up for sale soon after the restructuring is complete.

All Things Digital's Liz Gannes said that the site would be offered to private equity, or possibly Yahoo.

In total, MySpace laid off about 500 people. The move comes just six months after the once-thriving social networking site let go approximately 30 percent of its staff due to declining advertising revenue.

Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Janice McDuffee