When social gaming was at its peak of popularity one game provider was successful in releasing several game titles that had millions of people playing every day. Zynga develops games for various platforms such as Android, iOS and the web with titles such as FarmVille, CityVille and Zynga Poker being popular worldwide.
Today, the company is facing financial struggles as they announced that they will be cutting 520 jobs, which is one fifth of their workforce. They will also be closing down some of their offices in the United States such as those located in New York, Los Angeles, and Dallas. Zynga CEO Mark Pincus explained to his employees through a note that structural changes are to be implemented by the company.
The job cuts will save the company between $80 million to $90 million. This amount is a huge help to negate the effects of the projected second quarter net loss of between $39 million and $28.5 million.
This isn’t the first time the company announced a layoff as last year the company also trimmed down their staff.
“Today is a hard day for Zynga and an emotional one for every employee of our company. We are saying painful goodbyes to about 18% of our Zynga brothers and sisters. The impact of these layoffs will be felt across every group in the company.”
“None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward. 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 multiplatform, which is where social games are going to be played.”
Pincus added that those employees affected by the layoffs will be getting a generous severance package.
Zynga has been struggling to attract more players to its newer titles as they didn’t have the same effect as FarmVille.
The company began trading on the NASDAQ in December 2011 after its huge growth. Share prices back then stood at $10 and even went as high as $14.50 in March 2012. Right now it is valued at $3.41 each.
Pincus is optimistic that the company will rebound from this financial crisis. In the note he sent to his employees he stated that “Although these are hard decisions, I’m confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term. I’m encouraged by our recent progress. Running With Friends is a great example of the quality player experience we can deliver, already receiving an average 4.5 app star rating from 22,700 players in less than one month after launching. Our FarmVille franchise teams continue to innovate and deliver ground breaking new social experiences like County Fair which, despite only being available on the web, is engaging 39 million monthly players.”