Napster has denied claims the digital music company is on the verge of a major shake-up that could see large numbers of employees lose their jobs. It also rejected allegations that Napster's bosses are planning to sell the business - or shut it down.

The charges were made this weekend by sources, said a report at website Digital Music News, to be "close to the situation".

But while one Napster insider said the claims sound like "idle New Year speculation... all the plans I know of for Napster in 2006 relate to new products and expansion", industry sources told The Register they too have heard such allegations, in particular that the company is making job cuts here in the UK.

Results for Napster's most recently completed quarter, Q3 FY2006, which ended 31 December 2005, are due to be made public early next month. The company's second quarter, which ended 30 September 2005, led it to report a net loss of $13.61m (32 cents a share) on revenues of $23.38m.

Last week, Apple CEO Steve Jobs claimed the iTunes Music Store has an 83 per cent share of the US digital music download market. That leaves Napster battling the likes of RealNetworks, Virgin Digital, Yahoo! Music, WalMart and others for the remaining 17 per cent. UK-specific research put Napster's local share at 10 per cent - well behind ITMS' 54 per cent share of the market, but still in second place, just ahead of UK digital music pioneer Wippit.

Last month, Napster set up shop in Germany - the fourth market the company has entered after launching in the US, the UK and Canada. ®