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Zynga cuts 520 employees, closes New York and Los Angeles offices

Zynga cuts 520 employees, closes New York and Los Angeles offices

Mon 03 Jun 2013 7:30pm GMT / 3:30pm EDT / 12:30pm PDT
MobileSocialJobs

18 percent of global workforce is laid off as Zynga shifts toward mobile

Zynga has announced the layoffs of 520 employees, which is approximately 18 percent of the company's global workforce. An additional report by AllThingsD also has the company shuttering offices in New York, Los Angeles, Austin, and Dallas. The cuts in staff and infrastructure will lead to cost savings of $70 to $80 million, and the workforce reduction is expected to be complete by August 2013.

In a letter to employees, Zynga chief executive officer Mark Pincus said the company is shifting towards mobile development, instead of the social browser games that led to its rise.

"Today is a hard day for Zynga and an emotional one for every employee of our company. The impact of these layoffs will be felt across every group in the company," said Pincus in the letter. "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."

Zynga is projecting net losses for the second quarter of 2013 in the range of $28.5 to $39 million.

23 Comments

Popular Comment
Bruce - there is vacancy :)

Posted:A year ago

#1

Bruce Everiss
Marketing Consultant

1,692 594 0.4
EA laid off 900 in April.

Zynga are restructuring to match the demands of their customers. Facebook games are in decline. Mobile games are booming.

Posted:A year ago

#2

Justin Biddle
Software Developer

149 456 3.1
It's a bit like console game sales isn't it. On the one hand some might just dash in and make the bold statement that the sales show console gaming is dead. Other, more considered, people might conclude that other factors such as the simple age of the current generation and the imminent launch of the next might also be a big factor ;)

Posted:A year ago

#3

Christopher McCraken
CEO/Production Director

110 251 2.3
No surprise. Pincus is a master of pump and dump. This is the side effect, the real dump as it were...

Posted:A year ago

#4

Christopher Bowen
Editor in Chief

400 523 1.3
Popular Comment
Bruce, weren't you saying Facebook was the wave of the future or some crap? Like, recently? That's the thing about people like you. You just want to latch on, blow up whatever the newest fad is, and get out while the getting's good. You and all the other "money" people - those that got into games because it's the latest thing, and not because you love games - are just locusts, coming in, destroying everything, and then moving on. You and Pincus are birds of a feather, which we can buy online via IAP for $1.99.

I hate watching it because I hate people who have nothing to do with the atrocious business decisions of Zynga and their scumbag executives walk out the door because the people above them are so insidious.

Posted:A year ago

#5

Andreas Gschwari
Senior Games Designer

555 606 1.1
Popular Comment
@Christopher: i thought long and hard about replying to your post. But your aggressive, hateful tone simply is not something i want to let slide.

As far as i can remember Bruce has been advocating mobile and not facebook, at least primarily. I might not always agree with Bruce, but this is an industry website and not reddit. We are here, with our opinions, to discuss them. Posts like yours diminish the possibility.

And at the threat of sounding offensive myself, what exactly have you contributed to the games industry yourself Christopher? Bruce has been a part of the UK games industry, in actual development and publishing since the late 80s if i am not mistaken. I might not see eye to eye with him, but he certainly has earned the right to an opinion, and a lot of us would do well to at least read it (even if we take it with a grain of salt).

Posted:A year ago

#6

Bruce Everiss
Marketing Consultant

1,692 594 0.4
@Andreas Gschwari

Thanks. I opened a home computer store, Microdigital, in Liverpool in 1978. Then went on to be a consultant at Bug Byte and then, in 1982, a director of Imagine software. Explained here: http://bruceeveriss.blogspot.co.uk/2012/08/bruce-everiss-in-video-game-industry-1.html

And I am not an advocate of Facebook games. The platform has some advantages, but too many constraints.

Edited 1 times. Last edit by Bruce Everiss on 4th June 2013 8:24am

Posted:A year ago

#7

Anthony Gowland
Lead Designer

166 476 2.9
Facebook games by themselves seem a dead end, but it does still look like a good proving ground for seeing what's popular with the casual market and worth spending the effort making multiplatform. Letting people play for a bit on facebook then carry on with their game on their phone is where it's at for casual.

edit: Also +1 to Andreas.

Edited 1 times. Last edit by Anthony Gowland on 4th June 2013 8:43am

Posted:A year ago

#8

Andreas Gschwari
Senior Games Designer

555 606 1.1
@Anthony: Exactly! this is why king.com are so successful at the moment.

Their approach is very good. They test games on their website. The ones people like go on facebook, those that do well there get ported to mobile. Facebook and mobile link together and the user can game wherever they are and progress the same account. They have been doing this for close to 2 years now and it's working out well for them. I think Zynga kinda missed that train.

Also, since nobody has mentioned that yet: all the best to those affected by the layoffs. I sincerely hope they all find new positions quickly!

Posted:A year ago

#9

Saehoon Lee
Director - Gaming

59 40 0.7
Usually, when there is some (or massive) lay off like this , people shows some care and concerns with people affected.., however, this time there has not been one so far. How interesting...

Having said that, my heart goes to hundreds who now needs to seek a new job.

(edit : arhh I just saw one above.. nice)

Edited 1 times. Last edit by Saehoon Lee on 4th June 2013 9:59am

Posted:A year ago

#10

Rick Lopez
Illustrator, Graphic Designer

1,269 941 0.7
Popular Comment
Its always sad when people lose there jobs.

However I dislike Zynga. Since I have nothing positive to say about them Ill keep my comments to a minimum. I never liked the way they operated or did business. I did not like how they copied other peoples games and cashed in on other peoples ideas. i did not like how they absorbed smaller companies in order to dissolve or take there IP. At the end of the day, it didnt help anybody. Just a hand full of people who did not care about games and wanted to fill there pockets and then walk away, leaving everyone else out in the cold.

Edited 1 times. Last edit by Rick Lopez on 4th June 2013 2:59pm

Posted:A year ago

#11

Nick Parker
Consultant

279 143 0.5
This should be about shifting sands not mass exodus and about judging the right scale for your business. While it looks like a the worlds turning its back on PC social games, there is still enough supply and demand to justify the integrity of the platform; but don't bet the ranch on it at this stage, and scale business plan ambitions accordingly. Andreas is right with the example of Zoo.com which understands just how to pivot its business without putting all its eggs in one basket - a multi-platform strategy reminiscent of retail discs on console and PC.

A short anecdote about growing teams too quickly. When I joined SCEE (PlayStation) in 1995, the then President, a wise veteran of media (Chris Deering) stated that he would build a team not too big just in case it hit a wall, after all, we were stepping into the unknown back then. We all loved working for the brand with the feel of a start-up so we were prepared to do the jobs of two people as Chris was not after growing personnel for his own ego or reward, but really cared about peoples lively hoods and team building. We bought into that ethos but we had a lot of fun in the early days as well which was the reward for the hard work.

Edited 1 times. Last edit by Nick Parker on 4th June 2013 2:34pm

Posted:A year ago

#12

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
Popular Comment
Zynga workers - I wish you the best finding better employment.

Zynga executes - I wish you all contract some exotic foot fungus and grow a 6th toe....on your heel.

Posted:A year ago

#13

Andreas Gschwari
Senior Games Designer

555 606 1.1
@Jim: Zynga is obviously a more extreme case, due to size, the type of games they make and their fast rise in the industry.

However i would argue that executives of many companies are similar in this regard, indeed often upper management in general has the same tendency to cash in, while others get made redundant.

I could list a handful of companies that i worked for which struggled financially, but where executives either survived large scale redundancies or jumped ship with a golden handshake.

One company i worked for previously is a good example. When i joined the company there were 90 odd people working there. Now it's 1/3 of that - many people ended up on the street or got paid out. Yet the people that were in charge still are in charge, and made profit in the process.

I am not a fan of the Zynga model at all, they grew too quickly as Nick pointed out, they swallowed studios and they did not make enough profit (keep in mind as well that companies like OMGPOP and the UK studios swallowed by Zynga also had to agree to the sale). Now studios are closed and hundreds of people are on the street. It's shocking indeed. But it is not unique by any means.

Edited 1 times. Last edit by Andreas Gschwari on 4th June 2013 3:16pm

Posted:A year ago

#14

Jim Webb
Executive Editor/Community Director

2,232 2,161 1.0
I agree. I'm not saying they are a completely unique case. Just that they are one of the worst examples in our industry.

Posted:A year ago

#15

Andreas Gschwari
Senior Games Designer

555 606 1.1
agreed :)

Posted:A year ago

#16

Anders Lundberg
Analyst

11 14 1.3
How much of Zyngas previous success depends on the overvalued IPO of Facebook? IMO this was a micro bubble burst.

Posted:A year ago

#17
Frankly, I think this is less about trends and more about product. Valve continues to succeed on PCs despite other publishers declaring the platform dead. While I agree Zynga should have diversified into mobile two years ago, when they tried, their version of FarmVille for iOS was vastly inferior to their Facebook one, as was their Cityville. Perhaps Facebook gaming has declined, but have you tried playing Zynga's titles lately? At Starbucks, it can take ten minutes to load. The ratio of how much you can play alone versus how much play requires begging from friends has slowly gotten worse and worse. They soured their own milk on Castleville and Indiana Jones Adventures. Mafia Wars 2 was just a broken version of Crime City that ran out of content within a few weeks. They needed fewer executives calculating ratios and metrics and a few more to actually try their products. Perhaps Zynga needs this change in focus, and Pincus might even be years late in steering the boat, but they could be doing a whole lot better with what they've got.

Edited 1 times. Last edit by Michael Scandizzo on 4th June 2013 4:59pm

Posted:A year ago

#18
Alas, OMGPopped.
In retrospect, Draw Something's meteoric rise and fall and the acquisition/management by Zynga should be a cautionary tale for all.
Comiserations

Posted:A year ago

#19

Gary LaRochelle
Digital Artist/Game Designer

58 51 0.9
First of all, I wish all of those affected by the lay offs a quick return to employment. Working in the game industry is a risky career choice. It's not like there are several game development studios in every city. Adding 520 game developers to the already limited game job openings is going to make for rough times for some.

I am not a big fan of Zynga and the way they have done business. But they can still save themselves if they would only change their attitude towards game development. They need to change from a "fast follow" format to one of original game development. I know they have the talent to do so (if they haven't already fired this talent in this last round of lay offs). They also have the money and resources to do so but for some reason are afraid to. If Zynga continues their current course, I'm afraid we will be seeing more lay offs down the road.

I'm also afraid that they are relying too much on the future (or possible future) of on-line gambling. In countries where on-line gambling is legal, they are n00bs. And the US is still years away from legalizing it (if it even does legalize on-line gambling).

Posted:A year ago

#20

Benjamin Crause
Supervisor Central Support

79 36 0.5
Its always sad to rad about layoffs but I can't help myself but feel like this is the first of many small bubbles to burst.

Posted:A year ago

#21
"Most layoffs are sad. You imagine big corporate settings where security is there to lead people out of the office so they don't make a scene. This was the opposite. Music was being played loudly, and people were ripping up Zynga hoodies and T-shirts.

"Anything that was Zynga was completely left there. The sentiment felt positive."

Posted:A year ago

#22

Adam Campbell
Associate Producer

1,136 914 0.8
These numbers are pretty mind-boggling, especially when we consider the rapid rise and fall. It also shows that 'headcount' isn't everything and we need to be so careful when offering hundreds of positions only to find a company unable to sustain them.

I hope the hundreds of people laid off at Zynga (and I'll throw mention for those at EA) manage to find something new, very soon if they haven't already. A shame really...

Posted:A year ago

#23

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