MUMBAI: Video game company Zynga which became famous when it created Farmville in 2009 will lay off 520 employees, or 18 per cent of its workforce, as part of an effort to stabilise finances.
The layoffs should save Zynga about $70 to $80 million a year. Zynga had managed revenue of $1.28 billion last year, which was an increase of 12 per cent. But a net income loss of $209 million was also recorded.
These cuts mean that the company will have around 2,300 employees. The company has been battling a falling share price and has also been losing users.
Its offices in Los Angeles, New York and Dallas will be closed. In his blog Zynga CEO Mark Pincus wrote," 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 per cent 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," he added.
"These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionising gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. 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," Pincus said.
"Because we‘re making these moves proactively and from a position of financial strength, we can take care of laid off employees. We‘re offering generous severance packages that reflect our appreciation for all of their work and we hope this will provide a foundation as they pursue their next professional steps," he further wrote.
"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. I want to thank every one of you for the spirit, creativity and energy that you‘ve invested in Zynga. 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," Pincus concluded.