In a memo to staff, Zynga CEO Mark Pincus detailed the redundancies and closures of studios in Boston Massachusetts, as well as Japan and Farnham, UK. Whilst the UK offices only represent 10-15 job losses, the global impact is around 3,000 redundancies.
It read:
In all, 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.
This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors.
These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile. Zynga made social gaming and play a worldwide phenomenon, and we remain the industry leader. Our success has come from our dedication to a simple and powerful proposition – that play is not just something people do to pass time, it’s a core need for every person and culture.
We will all be discussing these difficult changes more with our teams and as a company....I’m confident this puts us on the right path to deliver on the promise of social gaming and make Zynga into an internet treasure.
Following Zynga's explosive success as the market leader in Facebook gaming, progress has obviously slowed enough to warn investors of expected losses for the period. Despite Zynga's billion-dollar stock market flotation last December, shares originally traded at $10 are now worth $2.20. This disappointing announcement from what seemed a boom in 2010/11 for developers and social gaming could now herald a slow death for the genre.
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