MySpace Layoffs Rumored for This Week
We hear MySpace's Southern California offices are thick with rumors that the social network is planning some serious bloodletting this week. Scary as that sounds, some employees are apparently looking forward to the layoffs.
"Apparently everyone is expecting it and actually hoping for it," said a MySpace veteran with friends at the company. "I think the management owes the employees severance because of the terrible management mistakes they presided over." But MySpace's parent company is likely to be motivated more by self interest than mercy, which has fueled speculation in hallways and in MySpace's virtual Campfire chat rooms that MySpace is being slimmed down to make it more attractive to a potential buyer—lower costs and all that.
"It's still pretty well overweight from the fat days," the MySpace veteran said. That's really saying something, given that MySpace laid off 47 percent of its staff—500 people—in January. The slimming and a relaunch as a content portal didn't make MySpace attractive to buyers; News Corp. ended up with just one potential bidder for the site after six months on the market, and even that company wasn't willing to pay anywhere near the stated minimum price.
The timing of the rumored layoffs is not clear; the MySpace veteran heard tomorrow afternoon, while another source who still works for the company heard it would be closer to the 29th and to the end of MySpace's fiscal year.
As to the depth of the cuts, some MySpace hands believe they will be as deep as the January round. There is speculation that MySpace can be sold off as greatly slimmed down infrastructure for dark horse bidder Bobby Kotick, the ActiVision CEO, who presides over internet entertainment hubs like Call of Duty Online. Kotick's name is still actively bandied about at MySpace although there is still talk of other potential bidders (Kotick was reportedly the last one standing).
MySpacers can console themselves, at least, with the fact that the tech job market is heating up again, thanks to companies that know how to develop—or at least market—social networking better than News Corp. has.
Update: Added additional information from an additional MySpace source. The headline and first paragraph have been changed to reflect uncertainty about the timing of the cuts. They originally mentioned the rumor that the cuts would happen tomorrow afternoon.
Update 2: TechCrunch confirms with an inside source that "the company expects to lay off at least 150 of its around 400 employees tomorrow (37.5% of its staff)."