John Paczkowski

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MySpace | A Place for Layoffs

largest-axe3jpg-150x150jpgThe ax has finally swung at MySpace. This morning the AOL of social networks announced plans to sack 30 percent of its workforce. All told, 420 workers will lose their jobs, reducing the size of the company’s staff to 1,000 employees.

“Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company,” CEO Owen Van Natta said in a statement. “I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace. Our intent is to return to an environment of innovation that is centered on our user and our product.”

“MySpace grew too big considering the realities of today’s marketplace,” said Jon Miller, News Corporation’s (NWS) CEO of Digital Media. “I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward.”

The news follows a report by market research outfit comScore (SCOR), indicating that Facebook has surpassed MySpace in the U.S. market as the top social-networking site.

Below, CEO Owen Van Natta’s all-hands memo breaking the ugly news.


Today we are making a number of changes to MySpace’s domestic organizational structure. For the long-term health of the company we are making some very tough, but unfortunately very necessary decisions.

We are reducing our workforce from 1,420 employees to 1,000 – all divisions within the company are affected by this restructure.

These decisions are difficult for everyone, but especially for our friends and colleagues who contributed to MySpace’s success and are directly affected by the changes. Through no fault of theirs our company’s size became unsustainable. The future success of MySpace is dependent upon us operating as a nimble and entrepreneurial company with the adaptive mentality of a start-up.

I believe this is the first difficult step toward a major turnaround – a step that will not only shore us up in the short term, but position us for long term success. We need to become a more innovative company. Becoming more innovative is an ongoing responsibility for all of us, not a one-time effort. We are developing a process that will empower anyone in the company to contribute ideas and enable us to integrate your thoughts into our plans for the future. We will follow-up with details on this process in the coming weeks.

This week we will communicate the foundation for our company strategy. In the days ahead, I will visit a number of U.S. offices, starting tomorrow at HQ, MySpace Music, and El Segundo. On Thursday I look forward to seeing everyone in Seattle and San Francisco, and on Friday, I’ll be spending time with the team based in New York.

I’m honored to be working with you on the next phase of MySpace and I’m grateful for your patience during this difficult process.

Thank you,