Social entertainment website MySpace.com is dropping almost half of its staff in an ongoing transformation of its services.
Once the King of social networking, MySpace lost out to the phenomenal growth of Facebook over the past few years. News Corporation gave MySpace a limited time frame to turn around its loss-making services. The result was a relaunch as a “social entertainment” site aimed at “Generation Y”, which would be users aged 35 and younger.
The “restructuring” affects about 500 employees, representing 47 percent of the company. “These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product,” Chief Executive Mike Jones said.
News Corp has repeatedly indicated that it is open to selling the relaunched MySpace service to any interested parties, but reports just last week suggested that there are no ongoing talks.
Result for: restructuring
On Thursday, Blockbuster filed for Chapter 11 bankruptcy, meaning hundreds of stores will close over the next month as the company restructures.
Through bankruptcy, the company will eliminate about $900 million in debt, leaving the company with $125 million in debt to its senior bondholders. Other bondholders have been wiped out. Blockbuster’s common stock currently trades at 5 cents, meaning for the most part, all long term shareholders have been wiped out, as well.
CEO Jim Keyes said the restructuring will allow Blockbuster to “continue to transform our business model to meet the evolving preferences of our customers.”
Blockbuster has “a well-established brand name, an exceptional library of more than 125,000 titles, and our position as the only operator that provides access across multiple delivery channels — stores, kiosks, by-mail and digital,” added Keyes.
The company has about 3000 stores currently, with plans to close up to 1800 over the next year. 1000 closings were unveiled before the bankruptcy.
Throughout the bankruptcy, all stores and kiosks will remain open for current members.
Result for: restructuring
Sony America has announced that they will be cutting the price of the aging PlayStation 2 console by over 20 percent to $99.99 USD beginning tomorrow.
The company hopes the new deal will help push the lifespan of the console, which has sold almost 140 million units since its launch in late 2000.
The PS2 will now retail for $300 USD less than the cheapest PlayStation 3 model, which analysts and consumers alike agree, needs a price cut. Sony notes however that the company still loses money on every console sold, so a price cut would deepen current losses.
Sony is currently undergoing a major restructuring and is expected to announce their first net loss in 14 years.
Recently, Microsoft product management director Aaron Greenberg slammed Sony over their console sales figures, saying: “What we’re finding in our research is that a large portion of the volume we’re driving with Xbox 360 purchasers is actually PS2 owners choosing Xbox for the next generation. Xbox continues to head north while the PS3 is heading south. We’re gaining share.”
