Zynga is best known for making the Facebook games FarmVille, but also has a range of iOS and Android games.
The news of the layoffs was leaked via Twitter from Justin Maxwell (@303), who had found out about them from friends; he tweeted:
“Zynga just laid off 100+ employees (incl. my friends) in its Austin office during the Apple Event. Gave them 2 hours to vacate. RT please.”
Zynga’s downsizing resulted in the company cutting roughly 5% of its staff and the complete shutdown of its Boston office.
Zynga already carrying a negative stigma before the layoffs, and has not won any new fans with its recent actions. Many are viewing the conveniently-timed layoffs as a divergence tactic that disrespected the employees who were let go — although the practice of using major press events as a PR buffer is certainly not unique to Zynga. While the company was likely trying to minimize the impact of this news by releasing it during Apple’s event, it appears to have had the inverse effect.
However, perhaps even more damning to Zynga’s image has been the recent developments following the gaming company’s downsizing. During Facebook’s earnings announcement today, Mark Zukerberg expressed his displeasure with gaming’s contribution to the social network, specifically targeting Zynga’s 20% decline in overall payments.
Additionally a memo drafted by Zynga’s CEO Mark Pincus has also been circulating the internet, and has confirmed the 5% work force layoff and the shutdown of its Boston office. The letter also notes that Zynga will effectively be cutting support for 13 game titles, as well as reducing investments in “The Ville”.
Zynga’s recent actions appear to be a direct result of low earnings. Zynga will announce their earnings tomorrow, which may reveal the possibility for more drastic measures to come.