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Zynga lays off 18-percent of workforce to focus on mobile

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V-Tech    211

zynga-generic.jpg

520 employees to leave the company as it also closes three offices across the country

Gaming development behemoth Zynga is trimming down its workforce today by a dramatic 18-percent in order to refocus its efforts on mobile and touch screen gaming. In a company-wide memo obtained by Kotaku, CEO Mark Pincus explains that in order to focus in on Zynga's strengths the tough decision to cut jobs was necessary. While Zynga's original strategy of providing web games via platforms like Facebook took off initially, the company understands that the future is mobile. And although it seems tough on a large number of employees right now, Pincus explains that he is glad it is taking place "from a position of financial strength" rather than retreat.

You can call into question whether Zynga is actually financially strong at the moment, but the good side of this is that the company will be providing generous severance packages to the employees effected by this layoff. As for the future of Zynga, we can rest assured that it will continue to pump out some of the most popular games on mobile today. The full employee memo can be found at the source link below.

http://www.androidcentral.com/zynga-lays-18-percent-workforce-focus-mobile

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Shiranui    1,916

Zynga had 2888 employees?

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V-Tech    211

Zynga had 2888 employees?

Well, they wanted to create 100 games at the same time and for every possible platform there is. You need a lot of employees for that.... :)

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Raa    1,551

And so it seems the Facebook game bubble is starting to burst...

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chrisj1968    1,417

zynga... they never supported their games very well. now..we knoweth well why, me hearty gaming lads

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V-Tech    211

Zynga Shares Plummet 12% To $2.99 After It Announces Layoffs

Investors were unsettled by Zynga?s announcement that it is cutting 520 employees, or almost one-fifth of its workforce, with shares plummeting 12% to $2.99, before recovering slightly in after hours trading. Trading of Zynga shares were halted twice in the afternoon on the Nasdaq stock exchange, first for the layoff announcement and then again due to volatile trading during which the stock fell by as much as 15%.

Though Zynga said the layoffs will result in $70 million to $80 million in annualized pre-tax savings, its guidance for its second-quarter earnings is still a loss between $39 million and $28.5 million. As Anthony Ha reported earlier, Zynga?s rationale for the mass layoffs is to create a tighter, leaner operation as the company hopes to replicate the success of mobile gaming startups like Supercell and King.com, which have released huge hits despite their much smaller size. Zynga also plans to launch fewer game and franchises in order to focus on turning each franchise into a big brand name.

But today?s plummet in Zynga?s stock price shows that the company still has a long way to go in order to win investors over to its restructuring plans, especially since this isn?t the first time Zynga has attempted to reduce costs by laying off staff. Last October, the company fired 5% of its employees after cutting its revenue outlook for the third quarter of 2012, citing weakness in games like The Ville.

CEO Mark Pincus has described 2013 as a ?transition year? for Zynga as it continues to face a challenging environment on the Facebook platform, struggle to build its mobile revenue and deal with declining user numbers, but it?s still far from certain if the transition will be a positive one.

http://techcrunch.com/2013/06/03/zynga-shares-down/

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+virtorio    3,121

Well, that already sinking ship just hit an iceberg.

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V-Tech    211

Well, that already sinking ship just hit an iceberg.

The success was too big and too fast for them. Then bad management decisions were made and now they are in trouble.....

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Growled    3,880

Zynga can give EA a run for worst game company.

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+John Teacake    454

I dont understand that they were a game company that was solely based off the success of Facebook, But then they had the IPO before Facebook. How does that work?? Too much too soon. Also stop trading due to Volatile trading hmmmmmmmmm. i.e Someone got the nickers in a twist they were loosing too much money! Probably most pension funds invested in them haha

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