Zynga to Lay Off 364 People, Close Orlando Office as Part of Cost Reduction Plan

As Zynga works to reduce costs, the developer will create less games and move away from specific genres.

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Mobile and social game company Zynga today announced its Q1 2015 financial results, which saw the developer generating $167.4 million in bookings, outperforming the high end of its Q1 2015 outlook. With the company’s continued transition to mobile devices (and away from Facebook), mobile bookings accounted for 63 percent of Zynga’s total in the quarter, up 84 percent year over year.

Many numbers were up quarter over quarter, but down year over year. In Q1 2015, Zynga had 25 million daily active users (DAU), up from 24 million in Q4 2014, but down from 28 million in Q1 2014. In terms of monthly active users (MAU), Zynga had 100 million MAU in the first quarter of 2015, up from 98 million in Q4 2014, but down from 119 million in Q1 2014.

In addition to these earnings, Zynga announced its plan to reduce costs by $100 million, in part, by reducing its workforce by 364 people, or around 18 percent. The reduction is expected to be complete by the fourth quarter of 2015 and generate approximately $45 million in annualized savings.

Zynga CEO, Mark Pincus, commented on the layoffs in a recent earnings call:

We need to be more resourceful in how we manage our costs in order to fund our investments in great new games, people and data analytics. We’ve over-burdened our game teams with complexity and centralized expenditure.

Zynga Orlando will close as part of this move, and the developer will move away from developing sports titles. Specifically, this eliminates support for NFL Showdown, which launched in September 2014, and ceases development of the previously announced Tiger Woods golf title, which were both being led by Zynga Orlando. Zynga will also reduce its further investment in the runner genre, following the release of Looney Tunes Dash in December 2014.

As a result, Zynga’s previous estimation of releasing six to ten new games in 2015 has been decreased to six to eight new titles. Part of this lineup comes from Zynga’s NaturalMotion studio, which plans to release CSR Racing 2 later this year.

All told, Zynga will now focus on the development and support of titles in five main categories: action strategy, social casino, invest and express (FarmVille, as an example), casual and racing. Zynga’s vice president of games, Jonathan Knight, will take over the FarmVille franchise and drive the company’s future efforts as Zynga works to reinvest, as Pincus said, “in one of our most core categories.” FarmVille: Harvest Swap was announced in February 2015, and is expected to release later this year.