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Major Round of Layoffs Reportedly Hits Zynga [UPDATED]

Austin, Boston, and Chicago studios reportedly hit, with some closing outright.

UPDATE: An internal memo from Zynga CEO Mark Pincus has hit, wherein he describes the closure of the Boston studio and the layoffs in Austin. The memo also points to potential staff reductions via closure of the company's Japan and UK studios. A total of 5% of the company's workforce is expected to be laid off.

The memo in full can be found at the bottom of this story.

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Zynga CEO Mark Pincus, presumably praying for his company's bad fortunes to end.
Zynga CEO Mark Pincus, presumably praying for his company's bad fortunes to end.

The only thing worse than layoffs, in my opinion, are layoffs scheduled in time with a major event--like, say, an Apple press conference--so as to deflect bad press. If the reports we're hearing are true, Zynga just pulled that particular sleazy move in a major way.

Though the casual games publisher has yet to comment publicly, independent reports are coming out of Zynga's Chicago, Austin, and Boston studios. Austin has reportedly suffered a 100+ staff reduction, while Chicago and Boston are allegedly being shuttered outright. We're still trying to get official word on the validity of those closures, though multiple knowledgeable sources have all but confirmed them.

Zynga Boston was responsible for the Facebook game Adventure World, while Austin had been working on The Ville and Zynga Bingo.

These layoffs would mark yet another bleak spot in what's been a pretty bleak year all around for Zynga. After going public early in the year, the company saw its stock drop from $12 in early April, all the way to $2.21 as of this writing. Additionally, lawsuits have been filed, accusing the company's upper management of insider trading.

We'll update this story when and if we get an official response from Zynga.

INTERNAL NOTE FROM ZYNGA CEO AND FOUNDER, MARK PINCUS

Team,

Earlier today we initiated a number of changes to streamline our operations, focus our resources on our most strategic opportunities, and invest in our future. We waited to share this news with all of you until we had first spoken with the groups impacted.

As part of these changes, we've had to make some tough decisions around products, teams and people. I want to fill you in on what's happened and address any concerns you may have.

Here are the most important details.

We are sunsetting 13 older games and we're also significantly reducing our investment in The Ville.

We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult.

In addition to these studios, we are also making a small number of partner team reductions.

In all, we will unfortunately be parting ways with approximately 5% of our full time workforce. We don't take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them.

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.

These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile.

Zynga made social gaming and play a worldwide phenomenon, and we remain the industry leader. Our success has come from our dedication to a simple and powerful proposition – that play is not just something people do to pass time, it's a core need for every person and culture.

We will all be discussing these difficult changes more with our teams and as a company. Tomorrow, Dave and I will be hosting a post-earnings webcast (details to follow) and next week we will be discussing our broader vision and strategy during our quarterly all-hands meeting. I'm confident this puts us on the right path to deliver on the promise of social gaming and make Zynga into an internet treasure.

If you have any immediate questions, I hope you will talk directly with your manager, Colleen, or me.

I look forward to talking with you tomorrow.

Mark
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129 Comments

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friarmark

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Edited By friarmark

Hate to hear about people losing their job, but Zynga sucks.

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coaxmetal

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Edited By coaxmetal

"sunsetting"

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andygazi

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Edited By andygazi

Well, lets see if the free 5 star lunches go away. Hate to be fired but the corps still get their chef.

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CaptainFake

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Edited By CaptainFake

@burnttoast said:

I wish there would stop being layoff news stories, its hardly news about gaming. They also happen so often that it seems at times that 25-50% of all news is this sort of stuff.

Does anyone really find this sort of news feed worthwhile or interesting? Does it match the tone or goal of news about games?

It's interesting AND worthwhile news, because games don't just get developed, released and played in a vacuum.

Think about the insolvency of 38 Studios and the doctors leaving Bioware--news stories about these events are part of the greater conversation about the last gasps of the traditional MMO. When the GB crew talks about The Secret World, Guild Wars 2 and SW:TOR, for example, they reference these events because the context is important.

Zynga laying off employees and closing studios? It's important news. Any discussion of the trajectory of mobile gaming would be incomplete if no mention was made about the health of Zynga, the "leader" in mobile games, and the success or failure of the (clearly reviled) business model they're pursuing.

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HowDire

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Edited By HowDire

I hope those who have been let go land on their feet. People saying that Zynga is a "stain" on peoples CVs is bullshit. It's experience at the end of the day and that can be incredibly valuable, even if the company hasn't got the best reputation. If I had been offered a job at Zynga in the past, it would have been very difficult to say no.

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michael_katarn

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Edited By michael_katarn

I thought they were printing money over there? What happened?

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deactivated-5cdb69f34ac28

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Best of luck to the folks who lost their jobs.

Thanks for keeping us informed. It's not the happiest news, but at least it isn't ignored. Maybe it'll help get the word out in these areas and make it easier for these people to get new jobs faster.

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fattony12000

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Edited By fattony12000

They should come and work for us, on a good game.

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Hailinel

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Edited By Hailinel
@michael_katarn

I thought they were printing money over there? What happened?

People started to realize how much of a scam their social games are, I suspect.
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ei8htbit

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Edited By ei8htbit

@burnttoast said:

I wish there would stop being layoff news stories, its hardly news about gaming. They also happen so often that it seems at times that 25-50% of all news is this sort of stuff. Does anyone really find this sort of news feed worthwhile or interesting? Does it match the tone or goal of news about games?

U mad bro? Personally, I think the current state of the games industry as revealed by symptoms such as mass lay-offs and studio closures are entirely relevant to gaming culture so they deserve some real estate on this little island of paradise we call GiantBomb. The tone or goal of news doesn't need to "match" anything, that's up for everyone else to interpret since they are real events that for better or worse are just facts being reported. Also, articles have headlines for a reason (choose wisely).

To use a bigger Lego block: Sometimes people read Playboy for the political interview.

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wmoyer83

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Edited By wmoyer83

Farmville was a fad. People realize those games are money leeches and stopped playing. End of story.

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Branthog

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Edited By Branthog

As those I know who work at Zynga have told me in the past:

1) Getting fired or laid off from Zynga wouldn't be the worst thing in the world.

2) Losing their Zynga job would probably be the catalyst they need to get on with their career and do something more personally rewarding and less soul-sucking.

In other words, layoffs suck ass, but I don't particularly feel worse for them being laid off from a soul-sucking hostile workplace than I would for someone leaving an abusive relationship. You feel bad that things are going bad for them, but you don't feel bad that they're out of the relationship.

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Daryl

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Edited By Daryl

I'm glad this is happening :) fuck Zynga and all that support them.

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Gruff182

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Edited By Gruff182

Remember when Zynga bought Draw Something for $stupid?

I remember deleting it the second their logo popped up.

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tourgen

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Edited By tourgen
@heatDrive88

@Darkstorn said:

@tourgen said:

The game industry really seems to chew up and spit out the people who actually make the games. I guess you've got to get into management and insider trading to get the cash and job stability.

Yeah that certainly seems to be the case. I don't hear games journalists (the GB guys included) raising a fuss over the trend besides saying that layoffs are a 'shame' and then changing the subject. Maybe they don't see value in commenting on the industry politics.

Either way, I don't like it.

Layoffs happen every day in every business sector. The fact you hear about it in video games press is simply of consequence to your enthusiasm for video games.

@heatDrive88 That's not my experience in my industry. We certainly do not have the hire-fire cycles of the gaming industry. It's a pretty niche technical field though.
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WarlordPayne

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Edited By WarlordPayne

They're potentially shuttering 3 studios and that's only 5% of their workforce? How many people does Zynga have working for them?

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rjaylee

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Edited By rjaylee

@tourgen said:

@heatDrive88 That's not my experience in my industry. We certainly do not have the hire-fire cycles of the gaming industry. It's a pretty niche technical field though.

Sure, while maybe the field and sector in which you are employed under is better protected than others (or maybe even not as well as others), the factors which dictate the future profitability and job security vary entirely across the board in multiple differing ways economically, geographically, etc.

I think what we can both agree that it is ludicrous to assume that job security within the video games business can be fully protected from "going out of business", and that the factors which decide this are unique to every business sector, with video games being a tight mixture of the entertainment and information technology sectors.

I'm not saying the business of selling video games is a bad business - it's just an extremely volatile and expensive business, along with being potentially being highly profitable. To expect job security in this business is anything but low and highly dependent, is a pretty fantastical statement that can only be conjured by die-hard fandom/extreme enthusiasm, and poor knowledge of business.

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GERALTITUDE

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Edited By GERALTITUDE

@WarlordPayne: So, so, so many. Like, 2500 or something?

Zynga is the king of shovelware, and it take a whole lotta underpaid staff to be shovelin that fast.

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DanteFaustEsq

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Edited By DanteFaustEsq

@ChrisTaran said:

People working for that company are never going to get me to feel sorry for them. Look forward to the full closure of Zynga hopefully in the near future.

Then your a petty selfish shortsighted jerk for it. Being out of work and worrying if your going to be able to keep a roof over you head isn't fun, and because you don't like the practices of higher ups at a company doesn't mean you should visit your ire on the people who only have the choice to do what they're told.

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ChrisTaran

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Edited By ChrisTaran

@DanteFaustEsq said:

@ChrisTaran said:

People working for that company are never going to get me to feel sorry for them. Look forward to the full closure of Zynga hopefully in the near future.

Then your a petty selfish shortsighted jerk for it. Being out of work and worrying if your going to be able to keep a roof over you head isn't fun, and because you don't like the practices of higher ups at a company doesn't mean you should visit your ire on the people who only have the choice to do what they're told.

Who forced them to work for such a company in the first place? No one. It's not like Zynga only recently became a vile corporation. It's been that way from the start.

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jasondesante

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Edited By jasondesante

we dont need no water let the

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mpgeist

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Edited By mpgeist

It sucks when people lose work...but fuck Zynga.

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Zekhariah

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Edited By Zekhariah

Being a game industry employee seems kind of rough - it looks like the benefit of not having to write things like insurance adjustment software and drawing bland advertisements is enough of a draw.

But some amount of pull back had to come on this stuff occasionally. There was a good solid year where social games on facebook were hyped to replace all gaming and finally kill dedicated gaming centric PCs / consoles. Investment bubbles like that have to crash back into reality eventually, and in this case Zynga was way to enormous. It did surprise me that they never bothered to really challenge IDT or any of the casino machine makers though - it had seemed like their games were only slightly more game oriented then those, and the average per user return can be really high (even if you only getting a portion of it).

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medacris

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Edited By medacris

Agreeing with the "I hate Zynga, but I hate that people are losing jobs more" sentiment. Especially in this economy, losing a job is no fun. Best of luck to all who are unemployed now.

I don't think working there would be a real blight, either. As long as you can draw and code a little, I'm sure very few places would instantly turn you away.

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wrathofconn

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Edited By wrathofconn

As a company, you reap what you sow, and Zynga is built on some of the shittiest practices in the industry in terms of business and IP. Sucks that people are losing their jobs, but if you like games you shouldn't want a company like Zynga to stay in a position of power. Imagine if Gameloft was a major player in the industry.

And I wouldn't be surprised to see some of this same stuff catch up to EA and Activision too, if other publishers have their shit together for the new consoles.

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DanteFaustEsq

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Edited By DanteFaustEsq

@ChrisTaran said:

@DanteFaustEsq said:

@ChrisTaran said:

People working for that company are never going to get me to feel sorry for them. Look forward to the full closure of Zynga hopefully in the near future.

Then your a petty selfish shortsighted jerk for it. Being out of work and worrying if your going to be able to keep a roof over you head isn't fun, and because you don't like the practices of higher ups at a company doesn't mean you should visit your ire on the people who only have the choice to do what they're told.

Who forced them to work for such a company in the first place? No one. It's not like Zynga only recently became a vile corporation. It's been that way from the start.

Who forced them you ask, no person forced them, life did. Let's see how long you remain on your high horse when put in a position of looking for work worrying about paying bills and keeping a roof over your head, then we'll see just how long your righteous indignation holds out. Besides you talk about them like they were selling blood diamonds covered in black tar heroin, they worked for a shifty shady ass video game company. From the way you act I would assume you must not have a lot of experience in the real world, though if you'd like to prove me wrong please do.

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supersonic4336

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Edited By supersonic4336

To everyone that lost their job, hope you find something and our thoughts are with you.

To everyone still working for Zynga, polish up your resume. It could take years for the inevitable layoffs and closures to sink Zynga completely. Waiting for the other shoe to drop for that long isn't worth it.

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dario_silva

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Edited By dario_silva

lol