Print 10 comment(s) - last by half_duplex.. on Jun 5 at 10:57 AM

This equates to about 520 employees

Zynga announced today that it's making major cuts to its workforce and even closing down offices around the U.S.

Zynga said it is laying off 18 percent of its workforce (or about 520 employees) by August 2013. It currently has about 2,900 employees. 

The latest layoffs will affect all parts of the social gaming company. San Francisco-based Zynga will even have to close its offices in Dallas, Los Angeles and New York. 

The layoffs are expected to save Zynga about $70 million to $80 million. 

Zynga also announced that it expects a loss of $28.5 million to $39 million in the second quarter. 

The problem with Zynga is that it's having a hard time taking on the mobile space. Its Web business has been declining faster than expected, and its mobile efforts aren't enough to fill the gap. 

Zynga has also experienced financial trouble since its initial public offering (IPO). It filed its Form S-1 registration statement with the U.S. Securities and Exchange Commission (SEC) on July 1, 2011 and began trading December 16, 2011 at $10 per share. However, stock fell throughout 2012, hitting as low as $2.27 per share by October. 

Another issue for Zynga is that its casual, social games don't seem to have long-term viability. It has had to axe 18 games in recent months -- including PetVille, FishVille, Mafia Wars 2 and Vampire Wars -- due to reduced popularity (and to make room for new games).

While Zynga still has a few successful games, like FarmVille, they haven't moved to the mobile space quickly enough, and players have increasingly lost interest over the years. 

"None of us ever expected to face a day like today, especially when so much of our culture has been about growth," Zynga CEO Mark Pincus said in an e-mail message to employees Monday. "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."

This isn't Zynga's first set of layoffs. The company laid off 150 employees last fall as well. 

Sources: USA Today, CNN Money

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RE: No surprise here
By tayb on 6/4/2013 9:27:38 AM , Rating: 3
People have been saying the same thing about Angry Birds for years. Despite essentially releasing level packs Angry Birds is still in the top 30 paid app sales after 3.5 years on the market. At some point we are going to have to come to the conclusion that many of these "crappy" games have staying power and can generate massive amounts of revenue. Where Zynga went wrong was basically ripping off existing apps and offering no improvements. They had no creativity at all.

RE: No surprise here
By theapparition on 6/4/2013 9:46:17 AM , Rating: 2

Casual games are the bread and butter of the industry, despite what hardcore gamers choose to believe.

The big difference here is Angry Birds, Fruit Ninja, etc were all started on a growing mobile platform. Later they added desktop and other media.

While Zynga games stagnated on things like Facebook, which has a double hit of being primarily desktop, and declining users time spent on Facebook.

RE: No surprise here
By BRB29 on 6/4/2013 11:38:16 AM , Rating: 2
No, nobody likes Zynga games because they are remakes of the same games with different skins and words. They are also very bad at updating and supporting their games. They also likes to shut down games that some people put money into. They're also one of the buggiest games out there for a multimillion dollar developer. There's a lot of reasons why people hate zynga. To summarize it up, they just don't give a crap about their customers.

RE: No surprise here
By tdktank59 on 6/4/2013 3:11:08 PM , Rating: 2
Thats the problem with Zanga. They make an game and throw it at the wall and wait to see it stick (2-3% conversion of users into paying users)

So most likely the games you are talking about are the ones that did not gain enough traction to make it worth while. That being said maybe traction would have been better if they were not so buggy but either way.

Now look at Kixeye, Sure their games still have bugs but they focus on a few games rather than a bunch of games. And it shows. they get around 7-8% conversion on users unlike zangas 2-3%.

RE: No surprise here
By ppardee on 6/4/2013 3:20:06 PM , Rating: 2
Angry Birds is like Tetris, though. It has replay value (for some reason). Zynga's games were all about getting more of your 'friends' to 'play' and they took the same concept and reskinned it.

It's unfortunately all too common. There seem to be only a handful of games on the interwebs: Zuma, Bejeweled, TextTwist/Scrabble, Dynomite!, Breakout, Mahjong and Solitaire. You can occasionally download a Diner Dash clone or a 'find these things in this messy picture' games. As an old-school gamer, this makes me sad.

“Then they pop up and say ‘Hello, surprise! Give us your money or we will shut you down!' Screw them. Seriously, screw them. You can quote me on that.” -- Newegg Chief Legal Officer Lee Cheng referencing patent trolls
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