Major Round of Layoffs Reportedly Hits Zynga [UPDATED]

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Posted by Alex (2175 posts) -

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.

---

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
Staff
#1 Posted by Alex (2175 posts) -

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.

---

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
Staff
#2 Posted by Nigthguy (53 posts) -

Surprising

#3 Posted by radioactivez0r (847 posts) -

THIS IS TERRIBLE NEWS....?

#4 Posted by Gonmog (583 posts) -

Well no shock there. Zynga will fall of the way side, and all that will be hurt is the lower workers. Everyone on top will get out rich as hell and never have to work again. :/

#5 Posted by Narx (173 posts) -

I think this says a lot about the mens behind this company as a whole.

#6 Posted by Alexandru (301 posts) -

casual gaming is the future

#7 Posted by JDillinger (149 posts) -

But mobile games are the future!

Feel sorry for everyone who lost their job.

#8 Posted by ghostNPC (778 posts) -

Layoffs are always terrible.. but I don't know how to feel about this. Good I guess?

#9 Posted by Rockaholica (21 posts) -

I wasn't aware we had a Chicago office to close? *shrugs*

#10 Posted by Gonmog (583 posts) -

@ghostNPC: Na dont feel good. The people that lost there jobs are the ones that need the jobs! The people that are making the choices for bad games, are rich as all get out and do not feel the effect of this at all.

#11 Posted by crusader8463 (14422 posts) -

Glad to see a company with such terrible business practices going down but obviously it sucks for those that are going to be without a job. Here's hoping those folks land on their feet.

#12 Posted by abara (227 posts) -

real bummer all around... hundreds of people out of work, and the pieces of shit that run the company will be just fine

#13 Posted by MjHealy (1852 posts) -

It's crazy how fast Zynga's stock has dropped from being the next big thing to yesterday's jam. Console games are here to stay y'all.

#14 Posted by Toug (315 posts) -

I just saw a commercial last night for a Farmville branded "Hungry Hungry Hippos" spin-off.

Just throwing that out there.

#15 Posted by KoolAid (937 posts) -

I would and do feel bad. These are people who love video games. Just like you.

#16 Edited by CornBREDX (5306 posts) -

This sucks but not surprising considering the last news was heard I believe was the insider trading scandal.  
 
I would've been looking for another job after that hit. Can't get a better reason to believe the place is going under than something like that.

#17 Posted by benu302000 (213 posts) -

... and not a single fuck was given that day.

#18 Posted by walter_sobchak (139 posts) -

I still am absolutely amazed at how much revenue Zynga brings in for making digital cows that players need to click every 6 hours...

#19 Edited by walter_sobchak (139 posts) -

Also, Zynga has crapped all over any game company that wants to IPO any time soon... thanks Zynga!!!!

#20 Posted by Gizmo (5389 posts) -

Jonathan Blow likes this.

#21 Posted by alternate (2707 posts) -

Such conflicting emotions.

On one hand these are real people losing their jobs.

On the other - fuck Zynga.

#22 Posted by Shaka999 (480 posts) -

I hope the sleazy bastards running the company lose everything. Hope the guys working land on their feet.

#23 Posted by WilliamHenry (1203 posts) -

@MjHealy said:

It's crazy how fast Zynga's stock has dropped from being the next big thing to yesterday's jam. Console games are here to stay y'all.

I wouldn't say Zynga failing means an end to mobile games, I just think this keeps mobile companies from going public.

#24 Posted by ajamafalous (11997 posts) -

Sucks for the people who got laid off of course, but I can't help but laugh at Zynga.

#25 Posted by KirePDX (69 posts) -

Man, I really wish the Chicago development scene would be a little friendlier. I have to assume that the taxes here are too high, and the distance from the headquarters on the west coast make Chicago offices more vulnerable.

#26 Posted by Sackmanjones (4705 posts) -

Facebook games are still a good idea guys!

#27 Posted by Phatmac (5726 posts) -

This sucks. :(

#28 Posted by ChrisTaran (1612 posts) -

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.

#29 Posted by Mesoian (1574 posts) -

@alternate said:

Such conflicting emotions.

On one hand these are real people losing their jobs.

On the other - fuck Zynga.

Its understandable.

Focus on the people right now, as they're the ones who are important.

The social implications and how it relates to gaming can be discussed when people have their feet on the ground.

#30 Edited by ProfessorEss (7377 posts) -

@Sackmanjones said:

Facebook games are still a good idea guys!

Probably still a better idea than creating a new IP RPG with a terrible name and a breakeven point of 3 million sales.

#31 Posted by blastershift (65 posts) -

good hope they die and so does facebook.

#32 Posted by cloudymusic (1118 posts) -

Major sympathy to the employees affected by this, and a big middle finger to Zynga management for trying to pull this kind of stunt.

#33 Posted by Rob_NYY (19 posts) -

@Toug:

Don't forget words with friends the board game.

#34 Posted by claudius (185 posts) -

My thoughts go out to all the people losing their jobs over this. This really sucks.

#35 Posted by Raven10 (1791 posts) -

And to think, just a couple years ago Zynga was more profitable and more valuable than EA.

#36 Posted by Vonocourt (2130 posts) -

@blastershift said:

good hope they die and so does facebook.

Such unnecessary bitterness.

#37 Posted by TooWalrus (13203 posts) -
@alternate said:

Such conflicting emotions.

On one hand these are real people losing their jobs.

On the other - fuck Zynga.

Indeed. Hopefully these newly unemployeed people find new jobs at... I don't know, Native American casinos or something equally as slimy as Zynga.
#38 Posted by bigcess (129 posts) -

@Gonmog: You're absolutely right.

#39 Posted by Robopengy (471 posts) -

I wonder how fast big publishers are going to start pulling the plug on all their Zynga like stuff, or if that's already happened and I missed it

#40 Posted by falling_fast (2224 posts) -

feel bad for the people being laid off by this shitty fucking company.

#41 Posted by NaDannMaGoGo (338 posts) -

While it's a bad thing for the employees I, in the end, just want companys like Zynga to go down. And if that happens sooner or later the non-asshat employees are unfortunately the ones who suffer. So I hope they find new jobs quickly. Meanwhile Zynga will hopefully cease to exist as soon as possible. Sure, the CEOs etc. will still be millionaires but at least the company is done then :|

#42 Posted by TadThuggish (907 posts) -

I hope all those people find jobs they can feel good about.

#43 Posted by SupberUber (311 posts) -

I don't understand the funeral mood every time a company goes under. Good coders and artists are always in demand. It's not like they just dropped dead. They're talented and still standing. Also, bubble bubble bubble pop, bubble bubble pop pop!

#44 Posted by Deathpooky (1402 posts) -

I feel bad for all the people who are out of work, but incredibly happy that Zynga's terrible business practices are resulting in failure. If Zynga went public and succeeded wildly it would have had terrible ripple effects throughout the industry when it comes to monetizing and developing games.

#45 Posted by FonkyMucker (150 posts) -

My God!

Just because you don't agree with some of their business practices does not give you the right to hope misfortune on the employees.

I know someone who is now jobless because of this news, and I can tell you that his team didn't sit around all day dreaming of ways to ruin the game industry. They (had) found a market and are focusing on keeping that segment of the population entertained and engaged.

To those who blindly hate Zynga and their user, please grow up....games are no longer just for basement dwelling adolescents.

My thoughts go out to those trying to find a job in Boston. Hopefully the recent flood of 38 Studio employees doesn't make it impossible to find a opening.

#46 Posted by NekuCTR (1663 posts) -

Sucks that people are loosing their jobs, but if I was them I would have been getting a head start on job searching a LONG time ago.

#47 Posted by J12088 (453 posts) -

@SupberUber said:

I don't understand the funeral mood every time a company goes under. Good coders and artists are always in demand. It's not like they just dropped dead. They're talented and still standing. Also, bubble bubble bubble pop, bubble bubble pop pop!

It's because the mass majority of users on this site are still in school and haven't worked a day in there life. But there big enough to read a newspaper or see on the news how terrible things are so they jump on the bandwagon and pretend to give a shit. Course before the economy went down the toilet this sort of thing happened all the time anyway but nobody cared then.

Thats my theory anyway.

#48 Posted by Jensonb (1750 posts) -

Zynga is, quite easily, the worst company in the tech, gaming & entertainment sectors. My heartfelt best wishes to all those affected, it cuts me up to ear about people losing their jobs and I really hope those guys land on their feet. And...Fuck Mark Pincus. He is a dick.

#49 Posted by hollitz (1522 posts) -

People at the top fuck up, people at the bottom get fucked. Love the way businesses are run.

#50 Posted by Terramagi (1159 posts) -

I heard conventional gaming was dead, and mobile gaming was the wave of the future.

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