News Corp. revamp cuts about 500 jobs
LOS ANGELES (AP) — Struggling entertainment site MySpace said Tuesday that it is cutting nearly half of its staff worldwide, or about 500 people, after an extensive revamp in October overhauled its look and allowed it to be run with fewer people.
Mike Jones, the chief executive of MySpace, said cuts are “tough but necessary” and would put the site on a path to profitability while making it more nimble and entrepreneurial.
MySpace declined to say how much the cuts would save. A previous round of cuts in June 2009 eliminated 30 percent of its work force, or about 420 jobs.
The relaunch focused MySpace on giving its users, mostly aged 13 to 34, more ways to consume music, videos and celebrity gossip. Before, MySpace tried to be an all-purpose social networking site like Facebook. MySpace recently said it is no longer trying to compete with Facebook.
News Corp. bought the site in 2005 for $580 million, but it has been losing money consistently. In the three months through Sept. 30, the “other” segment housing MySpace lost $156 million, about $30 million more than the previous year, mostly because of lower search and ad revenue at MySpace.
By contrast, juggernaut Facebook is making money. According to documents recently shared with prospective shareholders, Facebook earned $355 million on revenue of $1.2 billion in the first nine months of last year.
News Corp. executives had put MySpace on a short leash to get profitable. News Corp. Chief Operating Officer Chase Carey told investors in November he would judge efforts to reboot the site “in quarters, not in years.”
MySpace said that since its overhaul, it is “trending positively” with an uptick in new and returning users, although it did not immediately clarify how many. Late last year, it had around 120 million global users, compared with more than half a billion for Facebook.