Sources: Layoffs hit RealNetworks

The online media company, which owns music service Rhapsody, went through a round of layoffs on Thursday, according to multiple sources. About 130 people have been cut.

Media and music company RealNetworks started to conduct companywide layoffs on Thursday, according to multiple sources with knowledge of the events. One source said that employees were being notified over the course of the day in a series of meetings. RealNetworks PR representatives declined to comment on the matter.

About 130 of the approximately 1800 RealNetworks employees have been laid off, which comes out to just over seven percent, a source close to the company said. The cuts were spread across the company's departments and regional offices, the source added.

Earlier on Thursday, gossip blog Gawker had reported that the New York office of Rhapsody America, a joint venture between RealNetworks and Viacom's MTV Networks , was closing. RealNetworks denied this report. Viacom laid off seven percent of its workforce on Thursday.

A source at MTV Networks told CNET News that there were, however, still Rhapsody America layoffs. Employees were cut from the joint venture's office space at Viacom headquarters; many of them were former employees of Urge, the MTV digital music service that was folded into Rhapsody America when the joint venture launched.

Reports surfaced in May that RealNetworks planned to spin off its gaming unit into a separate company.

UPDATE (1:19 p.m. PT): RealNetworks confirmed the layoffs on its official blog and in a filing with the Securities and Exchange Commission on Thursday afternoon: "On December 4, 2008, RealNetworks, Inc. notified or expects to notify about 130 employees, or approximately 7.5% of its worldwide employee base, of a reduction in headcount," the 8-K filing read. "(RealNetworks) reduced its employee base across most of its global facilities and functions and additionally eliminated about 30 contract personnel and consultants...eliminated the foregoing positions to reduce operating costs in light of slowing consumer and business spending due to the current economic downturn. Notwithstanding the reduction in force, the Company expects to achieve record revenue for full year 2008."

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Caroline McCarthy, a CNET News staff writer, is a downtown Manhattanite happily addicted to social-media tools and restaurant blogs. Her pre-CNET resume includes interning at an IT security firm and brewing cappuccinos.


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