Founder and CEO of Zynga, Mark Pincus, has confirmed that 5% of the organization’s workforce will be laid off due to a cost reduction plan designed to increase efficiency.
Pincus explains that the cost reduction plan is part of internal changes within Zynga, and will include cuts in spending on expenses such as data hosting, advertising, and hiring contractors. Pincus believes that this will advance Zynga’s success in the future.
Pincus further detailed in a memo that Zynga will be closing down its Boston studio, and is proposing to close its Japan, and UK studios.
“In all, we will unfortunately be parting ways with approximately 5 percent of our full-time workforce,” mentioned Pincus in his memo.
Along with the layoffs and closing studios, Zynga will also be decreasing its investments in 14 of its older games, including ‘The Ville’.
“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,” Pincus stated. “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.”
Their stock is down to $2.22, last I checked. Zynga is finished.
This is what happens when you let pompous nerds make managerial decisions
Reminds me of something. There was a Forbes article where a guy came to the conclusion that Zynga was worth… Nothing. Absolutely Nothing. http://www.forbes.com/sites/ericsavitz/2012/08/01/zynga-is-the-business-really-worth-nothing-at-all/ It was effectively spending as much as it would get and this was at the point where any.
…And their stock fell another half a dollar in two and a half months.
They’ll be some annoying background thing, like Gameloft.
You know, I really love how these articles always have the mandatory “Internal restructuring” buzzword on them. Certainly this is the most popular cost reduction plan.
Oh, but more important. The day Zynga bought OMGPOP, for some reason all the servers started lagging like a bitch. And apparentelly that site lost half if not more of its population – with absolutely NOTHING changing about it other than the owner.
Considering me and my teamspeak mates usually played stuff over there to pass the time in-between games (dinglepop is just so unfair and fun) and stopped right then and there completely unaware it was zynga’s doing at the time, that was a real unnecessary hard blow for them to spark some personal hatred.
My stock market knowledge is slightly weaker than my cheese-lore, so I may be interpreting this incorrectly. If the Forbes article’s list of Zynga’s assets remains correct, then the company owns approximately $2.15 billion in assets, if you include payments they expect to be receiving from other people. If you count only cash in the vault and hard assets, it’s more like $1.65 billion. So then, if the “value” of all stock available on the market falls to less than that, then someone could buy out the company and effectively be buying money at a discount, right?
Guys, I’ve got a great idea! It’ll be the greatest con since Noonien!
From some articles and opinions I’ve read here and there, and my only slightly educated opinion, what I believe is happening is that the social/casual gaming event was not entirely unlike a fad that has already peaked and is currently coming back down the slope on the other side. It doesn’t help much either that thanks to Zynga and others the market became way over saturated with these games, and as we all remember from Guitar Hero (and most likely the soon-to-be Call of Duty series), that is the fastest way to dig something into a hole. So that one-two punch of fad death and over indulgence just added a thruster on the back of the trend sending it rocketing downward.
I’m expected a Kongregate scenario where soon some larger player will envelop the company so you can burn some time on their site while doing other things.
mobile gaming is the future they said….
their stock actually jumped $16% amid better-than-expected news which I find pretty silly.