Zynga lets 100+ employees go, closes Boston studio and contemplating more closures
Zynga has reportedly let over 100 employees go from its Austin office, according to rumors on the web.
The story broke by Justin Maxwell on Twitter, who learned about the events from a friend who was dismissed. Details are sketchy right now, but those who were let go were apparently on The Ville and Zynga Bingo teams. We’ve reached out to Zynga and are awaiting a response.
The Austin office was the studio behind The Ville, the social game currently serving as the eye of a particularly nasty legal storm between Zynga and Electronic Arts. Since the game launched in June its initial traffic surge has quickly fallen off, losing approximately 45 percent of its users each month.
Update #1: Gamasutra is reporting it can confirm the 100+ layoffs, as well as more rumors that Zynga shut down its offices in both Chicago and Boston. We’re still waiting a response from the company itself.
Update #2: TechCrunch has confirmed Zynga Boston is closed down, as well as the earlier reported layoffs over at Chicago. The sit also reports The Ville is being transferred over to the company’s India office, which is where it sends games that have been sunsetted.
Update #3: Zynga has confirmed the layoffs, as well as the sunsetting of 13 unspecified older games, including “significantly reducing our investment in The Ville.” Zynga is also considering closing its Japan and UK studios. The total number of staff currently dismissed is less than 5 percent of Zynga’s total workforce. Below is the letter CEO Mark Pincus sent to Zynga employees today.
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.