Updated: MySpace Cuts U.S. Staff By Nearly 30 Percent; CEO: Staffing Level Was Bloated
This story was written by Staci D. Kramer.
The shoe has dropped at MySpace and it's a big one: the News Corp social network is cutting nearly 30 percent of its staff, reducing the domestic staff size to 1,000 from 1,420 as it tries to dial back to a start-up cultureand to make money.
With no mention of staff beyond the U.S., the official announcement and a memo from CEO Owen Van Natta carefully sidestep whether more layoffs are on the way in MySpace's global operations. Questions to MySpace on the subject were not answered, with a spokeswoman saying MySpace would not go beyond the release.
One of Jon Miller's mandates as News Corp (NYSE: NWS). CEO of Digital Media and chief digital officer is to set MySpace right. Moving faster than anticipated, Miller replaced CEO Chris DeWolfe with former Facebook exec Van Natta and added Mike Jones and Jason Hirschhorn. . At Facebook, Van Natta was at a phenom on the rise but Jones, who spent time at AOL (NYSE: TWX), and Hirschhorn, who went through waves of reorgs at MTV Networks (NYSE: VIA), are no strangers to once-hot companies that need a serious reheating. Less than six weeks later, the team is backing its promise for change with a dramatic staff cut. Now they have to deliver on doing more with less. Van Natta, who said in a memo that the staffing he inherited was "unsustainable," promises to communicate "the foundation for our company strategy" this week in meetings across the company, starting Wednesday.
The full release is below:
"As part of a plan to restructure itself into a more innovative, efficient, and entrepreneurial business, MySpace announced today that it will reduce its staff by nearly 30%. This restructuring plan crosses all U.S. divisions of the company and lowers the total number of domestic staff at MySpace to 1,000 employees.
Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company," said MySpace Chief Executive Officer Owen Van Natta. "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 Jonathan Miller, News Corporation's CEO of Digital Media and Chief Digital Officer. "I believe this restructuring will help MySpace operate much more effectively both structurally and financially moving forward. I am confident in MySpace's next phase under the leadership of Owen and his team."
Update: From Van Natta's staff memo via BusinessInsider: "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."
By Staci D. Kramer