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MySpace mulling massive layoffs?

MySpace Logo (Nov 2010)A report from All Things Digital claims that MySpace could be laying off as many as half of its 1,100 US and international employees in the near future. The beleaguered website has had its share of challenges this year, including a design overhaul and a very public warning from owner News Corp.

Some media outlets have been reporting that in a preemptive move, MySpace’s entire staff was sent on mandatory vacation the entire last week of the year for expense reasons. In fact, the social networking site contacted All Things Digital to set the record straight, claiming that the time off was purely “an employee perk.”

There’s been widespread speculation that MySpace is preparing itself for sale, and that this might be the best case scenario for the former digital media giant. One rumor pegs Facebook and Zynga as partnering to acquire MySpace, which sounds like wishful thinking on someone’s part to us. If the site is indeed sold, it’s said to be more possible that the new owner will be “a private equity buyer.”

It’s been a tumultuous few months for MySpace. After user numbers continued to plummet, the site rebranded itself as an entertainment hub, focused on connecting artists and their content with fans. A week later, owner News Corp announced it would continue to keep a watchful eye over MySpace’s progress, and that the site and its monetary losses would be judged “in quarters, not years.” And despite giving in by finally introducing Facebook integration, MySpace has been unable to shake its’ speculated “for sale” status.

The company has yet to comment on the layoff rumors, but if they turn out to be true, it’s just the latest chapter in MySpace’s struggle to stay afloat.