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

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.

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Latest comments (19)

Bruce - there is vacancy :)
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Bruce Everiss Marketing Consultant 8 years ago
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.
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Justin Biddle Software Developer 8 years ago
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 ;)
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Show all comments (19)
Christopher McCraken CEO/Production Director, Double Cluepon Software8 years ago
No surprise. Pincus is a master of pump and dump. This is the side effect, the real dump as it were...
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Christopher Bowen Editor in Chief, Gaming Bus8 years ago
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.
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Bruce Everiss Marketing Consultant 8 years ago
@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:

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

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Anthony Gowland Director, Ant Workshop8 years ago
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

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Saehoon Lee Founder & CEO, Pixellore8 years ago
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

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Rick Lopez Illustrator, Graphic Designer 8 years ago
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

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Nick Parker Consultant 8 years ago
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 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

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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
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.
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Jim Webb Executive Editor/Community Director, E-mpire Ltd. Co.8 years ago
I agree. I'm not saying they are a completely unique case. Just that they are one of the worst examples in our industry.
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Anders Lundberg Analyst 8 years ago
How much of Zyngas previous success depends on the overvalued IPO of Facebook? IMO this was a micro bubble burst.
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Michael Scandizzo Partner, Inert Soap8 years ago
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

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Alas, OMGPopped.
In retrospect, Draw Something's meteoric rise and fall and the acquisition/management by Zynga should be a cautionary tale for all.
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Gary LaRochelle Digital Artist / UI/UX Designer / Game Designer, Flea Ranch Games8 years ago
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).
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Benjamin Crause Supervisor Central Support, Nintendo of Europe8 years ago
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.
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"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."
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Adam Campbell Product Manager, Azoomee8 years ago
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...
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