MySpace is laying off 500 employees, or about 47 percent of its global staff, as part of a restructuring by the once-leading, now struggling social-networking site.
The reorganisation includes striking up partnerships in the UK, Germany and Australia for managing advertising sales and content, MySpace said.
MySpace CEO Mike Jones tried to put a somewhat positive spin on the news, saying in a statement that user engagement has improved since the relaunch of the site in October as an entertainment hub for young people.
"Today's tough but necessary changes were taken in order to provide the company with a clear path for sustained growth and profitability. These changes were purely driven by issues related to our legacy business, and in no way reflect the performance of the new product," he said.
Jones also forecasts that MySpace will now be a more agile and flexible organisation that can accelerate product development and foster a culture of entrepreneurship and innovation.
Still, MySpace, which went through a major round of layoffs in mid-2009, faces an uncertain future.
As Facebook has become the world's dominant social network, speeding past MySpace in late 2008, MySpace officials have had to scramble to keep the site relevant.
It remains to be seen if its redesign as an entertainment hub for members of the so-called Generation Y will be successful and give MySpace a new lease on life.
People already have many options for entertainment content on the web, as music, TV shows and movies become widely available on the web via many sites and services such as Apple's iTunes and Amazon.
MySpace officials have been talking about reinventing the site for a while. That was the message from Jones' predecessor Owen Van Natta, a former Facebook executive who resigned as MySpace CEO in February 2010, after less than a year in the job.
MySpace is owned by News Corp, which bought it for $580m in mid-2005, when the site ruled the emerging social-networking market and had great potential to be a gold mine of advertising revenue.
See also: MySpace announces 'Mashup' with Facebook