Today marks the ultimate backlash against the once unlimited and unprecedented growth of social media. News Corp. (NYSE: NWS) has announced in a press release that about 30% of the MySpace employees are being let go.
This is supposed to be “as part of a plan to restructure itself into a more innovative, efficient, and entrepreneurial business.” MySpace will reduce its staff by nearly 30% and crosses all U.S. divisions to bring the headcount of domestic staff closer to 1,000 employees.
The company even noted that staffing levels were bloated and hindered “its ability to be an efficient and nimble team-oriented company.”
Unfortunately, this is nothing more than a lesson for other social media companies. MySpace was king of the hill and then some. But on the web, it seems that any social media site or traditional media site is merely the next start-up’s benchmark to surpass. Then LinkedIn started coming hard and fast, and then Facebook passed it up and then some. Now you have social media sites for sports enthusiasts, the wealthy, and on and on.
Based upon how low and ineffective the ad models have been on social media, you can take this statement to the bank: this is not the last downsizing you’ll see from social media firms.
Jon C. Ogg
June 16, 2009