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[Updated] Zynga Closes Multiple Studios, Lays Off 18 Percent Of Work Force

by Mike Futter on Jun 03, 2013 at 09:01 AM

Update: Zynga has provided Game Informer with the letter that was sent out to staff today by CEO Mark Pincus. As previously reported, the entire company will feel the impact of these significant cuts, which are not yet complete. According to a press release issued by the company, layoffs will continue through August 2013.

To our Zynga Community,

Today is a hard day for Zynga and an emotional one for every employee of our company.  We are saying painful goodbyes to about 18% of our Zynga brothers and sisters.  The impact of these layoffs will be felt across every group in the company. 

None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward. The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.

These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games.  Mobile and touch screens are revolutionizing gaming.  Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect.  By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences. 

Because we’re making these moves proactively and from a position of financial strength, we can take care of laid off employees.  We’re offering generous severance packages that reflect our appreciation for all of their work and we hope this will provide a foundation as they pursue their next professional steps.

Although these are hard decisions, I’m confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term. I’m encouraged by our recent progress.  Running With Friends is a great example of the quality player experience we can deliver, already receiving an average 4.5 app star rating from 22,000 players in less than one month after launching. Our FarmVille franchise teams continue to innovate and deliver ground breaking new social experiences like County Fair which, despite only being available on the web, is engaging 39 million monthly players.

I want to thank every one of you for the spirit, creativity and energy that you’ve invested in Zynga.  You’ve reintroduced a generation of people to gaming and through these games offered them new ways to connect with their families, make new friends and even sometimes find love.

Everyone will be affected by these changes and I’m sure there will be many follow up questions to this email.  If you have specific questions relating to your project or team, please talk to your manager.  For any other feedback or thoughts feel free to email me directly.


Original Story:

Zynga has been having a tough time lately, and today brings more bad news. The mobile and social developer has closed its Los Angeles, New York, Austin, and Dalls studios. Nearly 520 employees have been laid off.

This represents approximately $80 million in staff costs and will impact the entire company. Additionally, Zynga has halted NASDAQ trading at this time. Staring last year, the company has been on a downward trajectory.

In October 2012, 13 games were taken offline, five percent of the total work force was laid off, and the Boston studio was closed. In January of this year, chief game designer Brian Reynolds, who worked out of the Baltimore satellite, departed. 

February brought word of losses to the tune of $209 million followed by closure of the Baltimore office, one of the Texas locations, and one of the New York studios. Finally, Zynga was sued at the beginning of April by a former employee alleging that executives were allowed to dump stock while rank-and-file employees were unable to do so, leading to huge losses for those holding shares.

We've reached out to Zynga for a statement.

[Source: All Things D]