Update: Zynga CEO Mark Pincus' memo sent to employees has been reproduced in full below. It confirms that 5% of the company's total full-time workforce is being laid off:
Team,
Earlier today we initiated a number of changes to streamline our operations, focus our resources on our most strategic opportunities, and invest in our future. We waited to share this news with all of you until we had first spoken with the groups impacted.
As part of these changes, we’ve had to make some tough decisions around products, teams and people. I want to fill you in on what's happened and address any concerns you may have.
Here are the most important details.
We are sunsetting 13 older games and we’re also significantly reducing our investment in The Ville.
We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult. In addition to these studios, we are also making a small number of partner team reductions.
In all, we will unfortunately be parting ways with approximately 5% of our full time workforce. 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.
This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors.
These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile. Zynga made social gaming and play a worldwide phenomenon, and we remain the industry leader. Our success has come from our dedication to a simple and powerful proposition – that play is not just something people do to pass time, it’s a core need for every person and culture.
We will all be discussing these difficult changes more with our teams and as a company. Tomorrow, Dave and I will be hosting a post-earnings webcast (details to follow) and next week we will be discussing our broader vision and strategy during our quarterly all-hands meeting. 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.
If you have any immediate questions, I hope you will talk directly with your manager, Colleen, or me.
I look forward to talking with you tomorrow.
Mark
This morning during Apple's iPad Mini event, Zynga employees began taking to Twitter en masse to report on significant layoffs at the troubled social gaming giant. Zynga has yet to make any official announcement and have not yet responded to our request for comment.
Individuals close to the situation are reporting that Zynga Austin bore the majority of cuts, with more than 100 jobs lost at that location. The entire Zynga Bingo and theVille teams have reported been let go, leaving only teams developing mobile products left at the office.
Gamasutra is also reporting layoffs or perhaps the closure of Zynga Boston and Zynga Chicago. TechCrunch reports that the San Francisco office is not seeing any layoffs today.
More Zynga employees have reported that an all-hands meeting has been scheduled for later this afternoon. A more solid picture of the extend and location of the layoffs is likely to follow.
Today's layoffs are the latest in a growing line of bad news for the social game maker. SuperData Research noted today that Zynga has less active players now than it had two years ago. Social game players are increasingly leaving Facebook in favor of mobile play. Most analysts agree that Zynga has failed to make the mobile transition rapidly enough.
