Snocap, the company founded by Napster creator Shawn Fanning, reduced staff by more than 50% on Friday.
The company let go of 31 employees last week, reducing the staff from 57 to 26.Fanning created Snocap in 2002 as a legitimate way for music to be shared on the internet.
After beginning as a means for musicians to sell their work digitally and independently, the company evolved to become a backend to online stores.
In recent years, Snocap and MySpace struck up a relationship for the distribution of licensed music.
Reports out of the US suggest that the company is up for sale. CEO Rusty Rueff has stated to the press that the "best course for the company is to be a part of a larger entity".
Fanning is still a director of the company but has not worked day-to-day in the operation for some time.
Many industry insiders claim the company was doomed from the start because of the damage Fanning caused with his Napster 'invention'. His involvement in the new business meant that many of the major label executives refused to work with him to build up Snocap after he nearly destroyed their business model.
