MySpace axes two-thirds of global workforce

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MySpace is to slash two-thirds of its workforce outside the US, just a week after a huge cull at home, as it struggles to compete with rival social networking group Facebook and the economic downturn takes its toll.

The group, owned by Rupert Murdoch's News Corporation, will cut its international workforce from 450 employees to 150, and close at least four of its offices as part of a restructuring drive, saying it had become "too big and cumbersome". The move comes despite half of its total users coming from outside America.

Owen van Natta, MySpace's new chief executive, said: "As we conducted our review of the company, it was clear that internationally, just as in the US, MySpace's staffing had become too big and cumbersome to be sustainable in current market conditions. Mr Van Natta, a former senior manager at Facebook, was appointed in April to lead the fight with its larger rival.

However, MySpace's profits are set to come under severe pressure this year as user numbers fall, the advertising market suffers, and a lucrative agreement with Google ends. The research group eMarketer said MySpace's advertising revenues could fall 15 per cent to $495m (£304m) this year.

MySpace put its offices in South America, India, Canada, as well as Italy, Russia, Sweden and Spain on alert yesterday, saying they could be shut down or face severe job cuts. London, Berlin and Sydney will become the group's key international sites.

This comes just days after the social networking website revealed it was to cut its US staff by almost 30 per cent to 1,000. Mr Van Natta called the workforce "bloated" and said it "hindered our ability to be an efficient and nimble" company.

News Corporation bought MySpace for $580m in 2005.