As part of a global restructuring plan, MySpace is to close their offices in Australia and will axe about 500 employees worldwide – or 47 percent of their entire global workforce – as speculation arise that MySpace might be sold by News Corp.
Offices will also shut down in the UK and Germany, with the UK’s operations to be conducted under an alliance with News Corp-owned .Fox Networks. Australia and Germany operations will be replaced with “strategic local partnerships… to manage advertising sales and content,” According to a statement by MySpace’s CEO Mike Jones.
“Today’s tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability. These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product,” Jones said.
“The new organizational structure will enable us to move more nimbly, develop products more quickly, and attain more flexibility on the financial side. We are also committed to rebuilding the company with an entrepreneurial culture and an emphasis on technical innovation.”
Mumbrella has confirmed that News Limited, News Corp’s Australian operations, will not be taking on advertising sales for MySpace. As well, as confirmed by Fairfax, IGN Entertainment – which runs alongside MySpace under Fox Interactive Media – will not close its Australian operations.
MySpace was bought by News Corp for US$580 million in 2005 – but it has since been taken over as the leader in the social networking sphere in recent years by Facebook, who previously was locked down as a college-only social network before expanding to a global audience. The very deep cuts in its job forces reflect the current state of MySpace, recently shifting its focus to an entertainment hub, rather than a social network – especially after it announced that it would also be supporting Facebook Connect.
It is also being hinted that the axes could pave a sale of the site to another company – with most analysts pointing to Yahoo. However, with Yahoo’s own woes as it also plans a refocus from search to content, it seems an unlikely home for the former darling of the social networking era.