At least they waited until after Christmas.
MySpace, the pioneering social networking website, will lay off as many as 600 of its approximately 1,000 employees on Tuesday, according to a report by NetworkEffect, which is part of the AllThingsD blog family.
It's the latest sign of the dramatic decline in MySpace's fortunes since it was purchased by Rupert Murdoch's media conglomerate News Corp. in 2005 for $580 million. AllThingsD is also owned by News Corp.
The layoffs are happening as News Corp holds on-again, off-again talks to sell MySpace to potential buyers, including private equity firms, according to NetworkEffect. Another rumor making the rounds is that Yahoo might pick up MySpace. Last week, CNBC reported that News Corp is on track to unload the social networking website by mid-2011.
Put simply, News Corp, a sprawling entertainment giant that owns a hugely successful Hollywood studio -- 20th Century Fox -- as well as television networks and newspapers on several continents, may no longer be interested in carrying a money-loser.
MySpace made up the bulk of the $156 million operating loss in its division in the first fiscal quarter, PaidContent reported.
At the time, News Corp President Chase Carey said: "Current losses are not acceptable or sustainable."
The MySpace cuts are the second round of mass layoffs by a struggling technology company in less than a month. In December, Yahoo jettisoned 600 employees of its own and closed several divisions.
As recently as early 2008, MySpace was still the No. 1 social networking site. But in April 2008, the website was overtaken by its younger rival Facebook. Since then, as MySpace's audience has eroded, Facebook's user-base has exploded.
In the last six months, MySpace has lost about 10 million users, bringing its audience to just over 35 million, according to Quantcast. Facebook, meanwhile, boasts more than 600 million users worldwide and is continuing to grow like wildfire.
The final capitulation appeared to come in November 2010, when MySpace began allowing its users to log in to the site with their Facebook accounts.
As it became clear that it was losing the social networking arms-race to Facebook, MySpace shifted its focus toward entertainment, particularly music. Thousands of bands -- including many small, independent bands -- continue to use the site to connect with their fans.
There's clearly some value left in the MySpace music platform. News Corp ought to think about a way to retain some of that value, even if the larger social networking platform has become unsustainable.
A Myspace spokesperson declined to comment.
Follow us for disruptive tech news: Sam Gustin and Epicenter on Twitter.
See Also:
