Zynga lays off 5 percent of workforce, shutters games

Zynga lays off 5 percent of workforce, shutters games

Summary: Social games company cuts 150 employees and ends 13 unspecified older game titles as part of its cost-cutting measures to regain profitability.


Zynga has laid off 5 percent of its full-time workforce and called time on 13 of its games in a cost-cutting campaign.

According to a company blog post Tuesday, the job cuts amount to some 150 workers out of Zynga's total staff strength of 2,900. CEO Mark Pincus, who issued a staff memo to announce the decisions, said the management team is also proposing to close its Japan and U.K. offices while reducing staff numbers in its Austin, U.S., studio. It had already closed its Boston office in the United States, he said.

"This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors," Pincus added.

Besides the cuts, the social games company also plans to "sunset" 13 unspecified game titles and significantly reduce investment in its latest game "The Ville". It will also go ahead with a "more stringent budget and resource allocation around new games and partner projects", to improve its profitability.

These cost-cutting measures will allow the company to reinvest in games and their Zynga network on Web and mobile, he added.

News of the job cuts was dropped on Oct. 4, 2012, when the company reduced the year's outlook and warned investors it would register a steep drop in sequential quarterly revenue for the first time since its December initial public offering (IPO). Pincus said then the company would be looking into how to proceed with the streamlining process.

The past six months has been rough on Zynga, filled with underperforming games, stock prices falling by more than 75 percent since it went public at US$10 a share and facing multiple lawsuits accusing it and its executives of copyright infringement and insider trading.

In early October, the company also revealed plans to write off nearly half of the US$210 million it paid for "Draw Something" game developer OMGPOP, which it acquired in March this year.


Topics: Tech Industry, IT Employment, Social Enterprise

Ellyne Phneah

About Ellyne Phneah

Elly grew up on the adrenaline of crime fiction and it spurred her interest in cybercrime, privacy and the terror on the dark side of IT. At ZDNet Asia, she has made it her mission to warn readers of upcoming security threats, while also covering other tech issues.

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  • These type of games short lived

    Who did not see this coming? The ideal of gaming comes from challenges to overcome. Some of these games are so basic in form that it does not take long for the challenge to go away and then the games become boring. Even console gaming has become that way, as we have seen sales dwindle as much as 50% year over year. After you have played one "CALL OF DUTY" you have pretty much mastered all of them. Their is even less a game can do on say a tablet or online gaming. At least with console gaming your interest is held for a bit longer.
  • Serves them right.

    Serves them right... I used to play "Draw Something" on my phone, with friends.
    This is a case where they need more smart people to work with the greedy ones:

    Then (I imagine this coordinates with when Zynga bought OMGPOP), following an update, suddenly the game became infuriatingly dominated with advertising - and in ways that tricked you into clicking it, like displaying the screen with the "next" button, then after a brief delay, the sudden appearance of a full-screen ad just as your finger was coming down on the "next" button.

    It made the game no longer fun to play, frustrating to use entirely, crossed the line of being manipulative of the very users who could either be raving fans or raging frustrated - so I uninstalled the game and haven't looked back. There's always the next hot trending social game.

    I'm absolutely positive I'm not alone. Serves them right.