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Dec312010

Myspace Planning Layoffs As Much As 50% of Its Staff

AllThingsD’s Liz Gannes reporting that trouble in MySpace land. The social networking site turned social entertainment hub–is in the midst of planning that could soon result in significant layoffs of its staff. The number could be as much as 50% of the 1,100 employees at Myspace, largely based in the U.S., but also in international locations.

The layoffs are also part of a larger rethink about the future of the Beverly Hills, Calif.-based company, which has had many difficulties in recent years, including several leadership upheavals and a talent drain, as well as stagnant growth.

She repeats, that management was still working out the details of more drastic cost-cutting measures that owner News Corp. has been wanting from Myspace, as its revenues and traffic have declined.

She also discusses the possibility that Facebook game-maker Zynga as a potential acquirer of Myspace. While the two companies had discussed closer ties in the past–back when Zynga COO Owen Van Natta was still CEO of Myspace–those talks went nowhere.

Several sources said a private equity buyer for Myspace is now the likeliest outcome if the online property is sold.

Myspace declined to comment on layoffs or acquisition talks.

[Source]