Social gaming giant Zynga used the background distraction of Apple’s press conference (in which Apple revealed the iPad Mini) to lay off 5% of their workforce. News of the cutbacks first began circulating via Twitter, as those affected took to the social media platform to spread the news.

Zynga’s Boston based development studio (which used to be Conduit Labs before being purchased by Zynga two years ago) has been closed. That development team was responsible for Zynga’s Indiana Jones Adventure World. In addition to the shuttering of the Boston studio, Zynga’s Austin studio (which used to be Challenge Games before it was purchased in 2010) has seen 100 job cuts. Those affected were given two hours to vacate the premises.

Once the Twitter dust had settled, Zynga CEO Mark Pincus circulated an internal memo in which these reductions were announced. The memo also covers the reasons why the reductions were deemed necessary. One reason for the Austin team’s cuts was the poor performance of their recent game The Ville; a game that also happens to be the reason for a lawsuit between EA and Zynga. You can read the full memo after the jump.


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. We waited to share this news with all of you until we had first spoken with the groups impacted.

As part of these changes, we’ve had to make some tough decisions around products, teams and people. I want to fill you in on what’s happened and address any concerns you may have.

Here are the most important details.

We are sunsetting 13 older games and we’re also significantly reducing our investment in The Ville.

We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult.

In addition to these studios, we are also making a small number of partner team reductions.

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. Tomorrow, Dave and I will be hosting a post-earnings webcast (details to follow) and next week we will be discussing our broader vision and strategy during our quarterly all-hands meeting. 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.

If you have any immediate questions, I hope you will talk directly with your manager, Colleen, or me.

I look forward to talking with you tomorrow.


Source: Gamasutra

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