It has not been a good year for MySpace.

It’s bad enough that MySpace is now playing second fiddle to Facebook, and that no one really talks much about MySpace when it comes to interesting social media services. Now, the company is going through a restructuring as the new management team scrambles to re-invent itself.

CNet reports the latest development is a decision to slash the number of employees by 30% to return to a “start-up culture” – something that might be a challenge when you have 1,000 employees.

MySpace is a long way from the days when Rupert Murdoch was being hailed as a genius for snapping up the company for $580-million, and it was attracting advertisers such as Google, which signed a three-year, $1-billion deal in 2006.

While MySpace still had 55 million unique visitors in the U.S last month, it seems like a niche service – a place catering to music fans. MySpace is clearly troubled by decline in traffic this year so the senior executive changes and the restructuring appear to be the tip of the strategic iceberg.