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Rumor: Myspace to lay off 37.5% of workforce on Wednesday

Jeff Hughes
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It is rumored that Myspace will be firing 150 of its current 400 employees Wednesday this week. More than one source within the company is saying that the cull is certain.

Gawker spoke to a Myspace veteran with friends at the company who believes many are expecting and even hoping for the cuts. He said, “I think the management owes the employees severance because of the terrible management mistakes they presided over.”

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There is speculation that the layoffs are an attempt to appear more attractive to potential buyers by being less bloated with costs. Myspace has already had a huge case of bulimia in January when it cut 47 percent of its 1,100 US and international employees, but that still wasn’t good enough for anyone to take the social networking site off of News Corps’ hands. Since 2009, Myspace has laid of more than 1,500 employees. These latest cuts will be about 37.5 percent of their staff.

It’s still not clear whether this will be happening on Tuesday or Wednesday, but Myspace’s fiscal year ends on Wednesday. TechCrunch reports that their own source is confirming that layoffs will happen. The 150 employee cut may also be related to a rumor that Myspace is being sold. TechCrunch says that the sale will be signed tomorrow and will be announced at the end of the week. There’s no word on who the buyer is, though Activision’s CEO Bobby Kotick is a frontrunner in the speculation.

It doesn’t seem like such a bad deal for all sides. NewsCorp gets to hand over a company that lost 10 million users between January and February, and was steadily being drained of it’s users by 14 percent each month. Employees that get laid off (who should have easily foreseen this) will not be pushed out into the cold. They’ll get to take part in a transition plan where they can work and get paid while they job hunt, though this probably only last a few weeks.

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