Zynga have revealed on the companies official blog that it will reduce its workforce by around 18%.
What this sadly means is that a large number of people are going to be out of work. This doesn’t come as a large surprise as Zynga have been suffering a lot. The share price hasn’t improved in quite a while and venturebeat reported the news of these layoffs yesterday has sent the stock plummeting another 12%. Figures of these job losses are placed at around 520 people.
These cuts are projected to cut costs of Zynga by around $70 to $80 million per annum. At the moment Zynga are set to reveal a loss of between $30 to $40 million for the quarter of April to June showing that cuts are desperately needed.
The one saving grace for those losing their jobs is that they are going to be offered a ‘generous severance package’ according to the blog entry. While not exactly the same security as full time employment, it is at least something. All we can do is hope that those losing their jobs, reportedly in August this year, will be able to find further employment right away.
Part of the statement by CEO Mark Pincus reads like this:
None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward. 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.
Honestly, I’m not a big fan of Zynga. There have been many reports of them blatantly copying other developers, ranging from the small mobile teams to even that of EA. However, as much as I dislike the culture of company it is never a good thing to see those who actually do the hard work being put out of a job. Best of luck to them in the future.