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MySpace to lay off about half of its staff [Updated]

January 11, 2011 |  9:22 am

Myspace

MySpace, the onetime leader in social-networking websites, is set to lay off about half of its employees on Tuesday, according to a report from the Wall Street Journal.

Both MySpace and the Journal are owned by Rupert Murdoch's News Corp.

Citing a "person familiar with the situation," the Journal reported that about 500 people at MySpace, based in Beverly Hills, will lose their jobs. MySpace officials could not be reached Tuesday morning for comment.

The job cuts are the result of the website's major business overhaul in an attempt to free it from "dismal financial performance," the report said.

News Corp. bought MySpace in 2005 for about $580 million. At the time, MySpace was hugely popular and the leading website in online social media. Since then, large numbers of users have left MySpace for Facebook and other websites.

MySpace has recently been trying to gain its audience back with a redesigned layout and rebranding as a social entertainment website focused on sharing and promoting music and video among its users.

News Corp. also owns picture-sharing site Photobucket, the video-game news website IGN.com, AskMen.com and the Fox TV networks and movie studios.

[Updated 10:01 a.m.: Times reporter Dawn Chmielewski has confirmed the MySpace layoffs for our sister-blog Company Town. The layoffs made up about 47% of MySpace's staff. From Company Town:

MySpace Chief Executive Mike Jones said the job cuts were necessary to streamline operations and put the site on a path toward profitability, following its relaunch last fall as an entertainment destination for Gen Y.

"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 in a statement. "The new organizational structure will enable us to move more nimbly, develop products more quickly, and attain more flexibility on the financial side."

Also, a previous version of this post incorrectly said News Corp. currently owned RottenTomatoes.com. News Corp. sold Rotten Tomatoes to Flixster in January 2010.]

RELATED:

MySpace updates will appear in Google real-time search results

U.S. advertising on social networks surges 20% to $1.68 billion, half of it on Facebook

-- Nathan Olivarez-Giles
twitter.com/nateog

Photo: A screen shot of MySpace's revamped layout. Credit: Nathan Olivarez-Giles / Los Angeles Times

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