MySpace Announces Layoffs, Restructuring: Is it Enough?

After months of reports and speculation MySpace announced today it's laying off 47 percent of its staff — about 500 employees — as part of "a significant organizational restructuring," according to a statement released by MySpace CEO Mike Jones.

Today's layoffs were inevitable — the company just hasn't been able to generate the ad revenue necessary to sustain its new business model, which focuses on users connecting with and around content, rather than competing with Facebook as a social network. Now the company will outsource local ad sales and content through local partnerships in Europe and Australia.

The big question: will this be enough to turn around the struggling social network? News Corp, which bought MySpace for $580 million in July 2005, continues to meet with potential buyers for MySpace and Jones alludes to that in his statement. He says "The new organizational structure will enable us to move more nimbly, develop products more quickly, and attain more flexibility on the financial side." That last clause "flexibility on the financial side," is key.

Today's moves may not be enough to convince buyers that MySpace is headed towards profitability. Last week I blogged about how News Corp is on track to sell MySpace by mid-year. Sources close to negotiations say that NewsCorp will have to layoff even more people to make MySpace an appealing takeover target.

Questions? Comments?