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.
Context & Ripple Effects
This would be the third round in two years if the rumors hold. MySpace cut roughly a quarter of its staff in 2009 amid talk of 25% or deeper cuts, then executed the big one in January 2011, eliminating nearly 500 jobs — a confirmed 47 percent workforce reduction framed internally as a path back to profitability.
The context is a company that has been bleeding for a while: traffic hit an all-time low of about 50 million monthly uniques last October, its mid-level management structure has been crumbling as top people leave with critical knowledge, and it is struggling to differentiate from Facebook. Gawker reports some Southern California employees are actively hoping the axe falls this time — a telltale sign that severance now looks like the better exit.
First-order effects
- At least 150 more MySpace employees face termination as soon as Wednesday, per TechCrunch's matching report, deepening a workforce already halved by January's cut.
- For remaining staff, the rumor mill itself becomes an attrition engine: those not cut must decide whether to stay through another restructuring cycle or leave on their own terms.
Second-order effects
- Each round compounds the knowledge drain documented since March 2010, when departures were already stripping out institutional expertise faster than replacement hires could absorb it — making whatever product pivot remains harder to execute.
- MySpace's music-industry partners and advertisers get a fresh signal of instability just as the company bets on repositioning itself as a music destination rather than a Facebook rival.
Third-order effects
- A repeated layoff cadence like this points to managed decline as a deliberate strategy: shrink toward a defensible content niche instead of contesting the social graph head-on with Facebook.
- If the pattern holds across the industry, it normalizes serial downsizing at first-generation social platforms, where scale economics reward consolidation around one dominant network and leave runners-up structurally unable to hold headcount.
The trend: First-generation social networks are entering multi-year managed-decline cycles of successive mass layoffs, retreating from general-purpose competition into narrow content niches.