We use cookies to provide you with a better experience. If you continue to use this site, we'll assume you're happy with this. Alternatively, click here to find out how to manage these cookies

hide cookie message
80,259 News Articles

Zynga lays off 18 percent of workforce, shifts focus to mobile

The impact will felt company-wide, said CEO Mark Pincus

Zynga, the social gaming services company, is laying off 18 percent of its employees in an effort to reduce its cost structure.

CEO Mark Pincus announced the layoffs Monday in a note to employees posted on the company's blog. Zynga, as of the end of last year, had more than 3,000 full-time employees, according to a filing with the U.S. Securities and Exchange Commission.

All told, more than 500 employees will be let go by August, Zynga said in a statement. Various offices are also closing, but Zynga declined to comment on specific locations.

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

"This is a necessary step to move forward," he added.

The layoffs are being framed by the San Francisco company as a way to capitalize on the growth of mobile devices and touchscreens that "are revolutionizing gaming," Pincus said.

"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," he said.

Historically, Zynga's network of users has been tightly linked to Facebook. Until recently the custom was for users to log in to Zynga through Facebook, but in March the company made changes to allow users to create their own accounts on the Zynga site. The move was designed to expand and solidify Zynga's own user base.

Some of Zynga's flagship titles include FarmVille, County Fair and Zynga Poker. "While our FarmVille franchise continues to perform well, other games are underperforming," the company said in its press release, without naming those games.

The closures of The Ville, Empires & Allies, Dream Zoo and Zynga City on Tencent were announced in April during the company's announcement of its first-quarter financial results.

Zynga's games are also accessible through Google+ and the Android platforms, but 86 percent of the company's revenue in 2012 was derived from Facebook, the company said in its most recent annual report.

Zynga reported total revenue of roughly US$1.28 billion in 2012, up about 12 percent, though a net income loss of $209 million was recorded.

The company expects its cost reductions to yield pre-tax annualized cash expense savings of $70 million to $80 million.

Zynga, which was founded in 2007, went public in 2011.

Zach Miners covers social networking, search and general technology news for IDG News Service. Follow Zach on Twitter at @zachminers. Zach's e-mail address is [email protected]


IDG UK Sites

Best Christmas 2014 UK tech deals, Boxing Day 2014 UK tech deals & January sales 2015 UK tech...

IDG UK Sites

LED vs Halogen: Why now could be the right time to invest in LED bulbs

IDG UK Sites

Christmas' best ads: See great festive spots studios have created to promote themselves and clients

IDG UK Sites

Why Apple shouldn't be blamed for exploitation in China and Indonesia