MySpace plans to lay off 550 to 600 workers on Tuesday, All Things Digital reports, citing sources familiar with the matter.

Rumors of MySpace layoffs have been rampant for some time but now appear imminent as the company restructures and parent News Corp. looks to sell the company, with Yahoo considering a bid, ATD claims.

After once being the top social networking site, MySpace has steadily been losing users in the past couple of years and was recently surpassed by Twitter when it comes to traffic. MySpace underwent a dramatic redesign a few months back, and the network still enjoys a lot of popularity with bands and music fans. However, whether the new direction for the company, which focuses on social entertainment — primarily music, TV shows, actors and games — will help MySpace gain new fans, remains to be seen.

If the report about the new layoffs proves accurate, this will not be the first major restructuring for MySpace. In June 2009, the company slashed 30% of its workforce, which left it at its current number of 1,000 employees.

We have reached to MySpace for a comment about the layoffs, but have yet to hear back from them.

[via ATD]