Rumors Swirl As Napster Lays Off 10% Of Staff

According to Digital Music News, Napster has layed off about 10 percent of it’s workforce mostly in the programming and marketing divisions. This confirms rumors of downsizing reported here last week.  Morale inside Napster is reportedly extremely low, but how far the cuts will go may not be revealed until an earnings report on February 8th.  Thus far Napster executives are denying that deep cuts are imminent pointing to a subscriber base that has recently reached 500,000.

With Apple’s continuing dominance of the player market and the iPod’s incompatibility with Napster, coupled with lower than expected acceptance of the music subscription model, these lay-offs are almost certainly just the beginning of an industry-wide shakeout.