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Zynga lays off 150 workers, closes studio, ends 13 games

October 23, 2012|By Ben Fritz
  • Zynga laid off about 5% of its nearly 3,000 employees on Tuesday.
Zynga laid off about 5% of its nearly 3,000 employees on Tuesday. (Paul Sakuma )

Zynga Inc. has laid off about 150 employees, shut down 13 games and is closing a production studio in a cost-cutting move for the troubled social-gaming giant.

The cutbacks Tuesday come almost three weeks after the San Francisco firm reduced its financial projections amid a weakening market for Facebook games and a day before it was scheduled to release third-quarter earnings.

Zynga is shutting down a studio in Boston that made its “Indiana Jones Adventure World” game. The company has proposed closing facilities in Japan and Britain as well, and is laying off staff at an Austin, Texas, studio that made “The Ville.”

Chief Executive Mark Pincus said in an email to staffers that Zynga is “parting ways” with about 5% of its workforce. As of March 31, the company reported having 2,916 employees.

“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,” Pincus wrote.

Audiences for many of Zynga’s “free-to-play” games, in which players only pay when they want additional items or features to assist in their progress, have been declining recently. The average number of daily players for “Indiana Jones Adventure World” has dropped to 100,000 from 170,000 in just the last month, according to the website AppData.

When the company revealed in early October that financial results would be weaker than projected, Pincus stated that Zynga would shift its focus toward more popular casino gaming titles.

Zynga picked up many of its studios, including all four affected by Tuesday’s layoffs, through acquisitions. Until recently, the company had been on an acquisition binge as its revenue and stock value grew fast.

On Tuesday, Zynga stock closed down 5% at $2.20. So far this year it is down 77%.

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