Zynga to cut 520 jobs

Social game giant laying off 18 percent of its workforce in an effort to reduce costs; offices in four cities closed; company to offer "generous" severance packages.


Social game giant Zynga is cutting 520 jobs--or 18 percent of its workforce--in an effort to reduce costs and re-focus around mobile, the FarmVille studio announced today.

The layoffs will affect every arm of the San Francisco, California-based company and will total $80 million in staff costs.

The workforce reduction will take place across all functions of Zynga's business and is expected to be mostly completed by August.

The move will result in the closure of Zynga's offices in New York, Los Angeles, Austin, and Dallas and also includes the "slashing of other major infrastructure costs," according to The Wall Street Journal's AllThingsD.

In a memo sent to staffers today, Zynga CEO Mark Pincus--who recently slashed his annual salary to $1--called the layoffs "painful," but also necessary if the company is to succeed going forward.

"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," Pincus said.

"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," he added.

Pincus said the staff reduction and company reorganization represents a "proactive commitment" to the company's mission of "connecting the world through games."

"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," he said.

Because Zynga is making these moves today, Pincus said, the company is able to offer "generous" severance packages that demonstrate the firm's appreciation for their time and effort.

"I want to thank every one of you for the spirit, creativity and energy that you've invested in Zynga," Pincus said. "You've reintroduced a generation of people to gaming and through these games offered them new ways to connect with their families, make new friends and even sometimes find love."

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