Zynga lays off 18 percent of its employees, shuts down 3 offices
Zynga today let go 18 percent of its employees (approximately 520 people) after shutting down its Los Angeles, Dallas and New York City studios. The studios that were shut down was first reported by AllThingsD. A small portion of the 18 percent were let go from Zynga’s Los Angeles office, which saw 55 employees losing their jobs, according to a tweet from an artist at the Los Angeles studio. Empires & Allies, the first game for Facebook from the Los Angeles studio, will be shut down on June 17. The layoffs and cost cuts will be completed by August.
According to a release from Zynga, the move will result in an estimated $70 million to $80 million in pre-tax annualized cash expense savings.
In February, Zynga closed it’s Baltimore studio as well as relocated its Mckinney, Texas and downtown Austin offices to its Dallas and North Austin Offices. The New York City offices saw consolidation as well, with the staff moving to the New York City mobile studio before being completely shut down today. In October 2012, Zynga laid off more than 100 employees, axing employees from its Chicago office, while completely closing down its Boston office.
In Zynga’s last earnings call, CEO Mark Pincus drove the point home that the gaming company was in a transition from web to mobile. As a result, Zynga has sunsetted more than a dozen of its titles in recent months. Zynga’s revenue has been on a decline every single quarter since it’s height in Q2 2012 at $332 million, falling to $264 million in Q1 2013. Zynga also revised its earnings forecast for Q2 2013, estimating a net loss in the range of $28.5 million to $39 million, up from $26.5 million to $36.5 million.
According to Barron‘s, Zynga halted trading of its stock on Nasdaq shortly before the company announced the layoffs. The stock has since resumed and is trading at $3.00 a share, down 12 percent as of 4:29 EST.
Inside Mobile Apps has reached out to Zynga for comment.
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