NEW YORK ( TheStreet) -- MySpace, News Corporation's ( NWSA) social networking site, is cutting 47% of its staff, or about 500 employees, as it attempts to restructure and revive the business. Almost 500 MySpace employees across all of its operations will lose their jobs this month, according to a statement from the Web site today, amid reports that News Corp. may be looking to sell the social networking site.
"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability," CEO Mike Jones said in the statement. "These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product." The site has about 1,000 employees in the U.S. and 120 staffers in London, Sydney and Berlin. Most of the 50 U.K.-based employees will leave the company as the business prepares to be folded into Fox Networks through a new local partnership deal. "Details about Australia and Germany are currently being finalized," Jones said. "MySpace will retain a core, dedicated international team to work with partners in order to ensure users, content partners and advertisers continue to be served."
In 2006 MySpace was ranked as the most popular social networking site in the nation, but was beaten out by Facebook in 2008, according to data from comScore. While it still remains a second to Facebook, News Corp. hopes a redesign will help it gain more respect in the social networking scene. News Corp. released its first quarter earnings on Nov. 3 in which it posted a decline in its digital media group revenue. The company attributed the drop to lower search and advertising revenues at Myspace. "We've been clear that MySpace has been a problem," News Corp. COO Chase Carey said on the quarterly conference call. "We had to rebuild the business." The company relaunched MySpace in 2010 with a focus on "social entertainment." Management made adjustments in its cost structure by reconsolidating ad sales, and said it intends to focus on getting the business to a sustainable level. News Corp. is down 1.3% to to $14.43 today. -- Written by Theresa McCabe in Boston. >To contact the writer of this article, click here: Theresa McCabe. >To follow the writer on Twitter, go to @TheresaMcCabe. >To submit a news tip, send an email to: firstname.lastname@example.org.