No, the rough times aren’t over yet. Some 18% of Zynga’s employees no longer have a job, after the social gaming company responsible for hits like FarmVille announced it was cutting its workforce to save costs.
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The biggest victim of the “structural changes” seems to be New York based games studio OMGPOP, which Zynga acquired last year for US$180-million. The team was responsible for the massively successful mobile game Draw Something, and, according to The Verge, accounted for a large portion of the 520 or so employees who were informed they no longer had a job.
Instead of trying to quietly fire employees using the cover of an Apple product launch (like it did in October), the company openly posted the note Zynga founder and CEO Mark Pincus shared with his staff informing them of the retrenchments. In it, Pincus explained that the company, which thrived on the back of social networks like Facebook (where web-based games like Zynga Poker and FarmVille gained popularity incredibly quickly) had to adapt to an increasingly mobile gaming market.
“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 multi platform, which is where social games are going to be played,” wrote Pincus. “Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences.”
Pincus says the departing employees will be offered “generous severance packages”, as they make way for a more mobile-focused Zynga. Despite the initial success of Draw Something and its follow-up, Draw Something 2, many of Zynga’s games have been unable to capture a sustained user base in the fickle casual mobile gaming market. Its more recent release Running with Friends, has seen some success in the App Store, with high ratings from its Apple-only users.
In a press release to investors, Zynga said reducing the size of its workforce would save it US$70-million to US$80-million. But it also said that it expects to make a US$39-million to US$28.5-million net loss this quarter in response to the restructuring and low income from its non-FarmVille games, which are “underperforming”.
