MySpace is owned by Rupert Murdoch's News Corporation
MySpace, the social networking site, has said it will cut almost a third of its staff as it looks to cut costs to compete with increasing competition.
The cuts total about 400 staff, leaving 1,000 people at the struggling unit of Rupert Murdoch's News Corporation.
MySpace said it wanted to return to the culture of a start-up company.
MySpace, which has about 125 million users, has been hit hard by the huge popularity of rival networking sites Facebook and Twitter.
"Simply put, our staffing levels were bloated and hindered our ability to be an efficient and nimble team-oriented company," MySpace boss Owen Van Natta said.
"I understand that these changes are painful for many. They are also necessary for the long-term health and culture of MySpace," he added.
News Corporation's head of digital media Jonathan Miller added that the company had grown "too big considering the realities of today's marketplace."
Mr Van Natra was appointed chief executive of MySpace just two months ago.
His job is to reinvigorate the site in the face of increasing competition. Facebook, for example, has considerably more users worldwide, despite being launched more recently.
The new boss said his aim was to "return to an environment of innovation."
Analyst Debra Williamson at eMarketer said the "very aggressive move" and was designed "to send a message to the marketplace that they're really taking the turnaround of MySpace seriously.
"Thirty per cent is more than a haircut. It's chopping the head off," she added.