Be sure to check out
Social Network Wars. Very funny and pretty accurate view of MySpace, Facebook, et. al.
On a serious note, I wouldn't read too much into them cutting their workforce. The economy the way it is, it makes sense, and they grew very rapidly. It's good to cut out some of the fat and will help make them a little more nimble.
I've heard that MySpace, although slightly edged out by Facebook (mostly because of Facebook's growth outside of North America), is still more profitable than Facebook.
Having said all that, I don't have a MySpace page anymore, but I do have a Facebook page. So there.