Zynga Cuts Workforce And Closes Boston Studio
October 24, 2012

Zynga Lays Off 5 Percent Of Workforce, Shuts Down Boston Studio In Move To Cut Costs

redOrbit Staff & Wire Reports - Your Universe Online

Zynga is laying off five percent of its workforce, shutting down its studios in Boston and Austin, sunsetting 13 older games and “significantly” reducing investments in The Ville in order to reduce costs, the company confirmed on Tuesday.

The social gaming company said it is also considering closing its offices in Japan and the United Kingdom.

“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,” wrote chief executive Mark Pincus on Tuesday in an email to employees.

“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.”

The move also includes “significant cuts in spending on data hosting, advertising and outside services, primarily contractors,” Pincus said.

The majority of the layoffs involve employees in Zynga´s Austin studio, home of The Ville.

Pincus said the reductions would help improve the company´s profitability, and allow it to reinvest in “great games and our Zynga network on web and mobile.”

Zynga has had a tough year, with its stock having plummeted nearly 90% since March.

Zynga has also struggled to maintain its position on Facebook, where its contributions to Facebook´s overall revenues has fallen from 12 percent a year ago to just 7 percent today, Facebook said in an earnings call on Tuesday.

At the same time, many gamers have migrated to mobile devices, where Zynga does not hold as strong a position.

The company, which recently lowered expectations for the remainder of the year, is due to report its third quarter financial results on Wednesday.