Zynga lays off 18 percent of workforce, shifts focus to mobile
The impact will felt company-wide, said CEO Mark Pincus
IDG News Service - 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.
- 15 Non-Certified IT Skills Growing in Demand
- How 19 Tech Titans Target Healthcare
- Twitter Suffering From Growing Pains (and Facebook Comparisons)
- Agile Comes to Data Integration
- Slideshow: 7 security mistakes people make with their mobile device
- iOS vs. Android: Which is more secure?
- 11 sure signs you've been hacked
- Pay-as-you-Grow Data Protection: IBM Tivoli's Full-featured Data Protection Suite for Small to Medium Businesses IBM Tivoli Storage Manager Suite for Unified Recovery gives small and medium businesses the opportunity to start out with only the individual solutions...
- Streamline Data Protection with IBM Tivoli Storage Manager Operations Center IBM Tivoli Storage Manager (TSM) has been an industry-standard data protection solution for two decades. But, where most competitors focus exclusively on Backup...
- Simplify and Consolidate Data Protection for Better Business Results Learn about IBM® Tivoli® Storage Manager Operations Center, which provides advanced visualization, built-in analytics and integrated workflow automation features that leapfrog traditional backup...
- HP HAVEn: See the big picture in Big Data HP HAVEn is the industry's first comprehensive, scalable, open, and secure platform for Big Data. Enterprises are drowning in a sea of data...
- Meg Whitman presents Unlocking IT with Big Data During this Web Event you will hear Meg Whitman, President and CEO, HP discuss HAVEn - the #1 Big Data platform, as well...
- The New Way to Work Knowledge Vault This Knowledge Vault focuses on how, in today's increasingly virtual world, it's more important than ever to engage deeply with employees, suppliers, partners,... All Personal Technology White Papers | Webcasts