Social media game-developing company Zynga closed it’s Cambridge offices on Tuesday and announced it would be letting go of roughly 5 percent of their overall staff to improve profitability in what the company leaders called the “most painful part” of a cost reduction plan.
“[The plan] also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors,” said Zynga CEO and Founder Mark Pincus in an internal email sent to his staff in various cities throughout the U.S.
Zynga is known for its Facebook game FarmVille, which came out of their Austin-based office, while the Cambridge office was responsible for the Indiana Jones Adventure World game which was played on the social media site.
In the letter, Pincus said the company would be “sunsetting” 13 older games, putting them to rest, and “closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios.”
“We don’t take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them,” he wrote in the letter to Zynga employees.
Workers in Zynga’s Austin, Texas office also took a hit, according to reports.
Employees of the company began Tweeting about the news on Tuesday afternoon, shortly after Apple wrapped up its unveiling of its latest products.
Mosavat’s profile indicates that he is the General Manager of the Zynga Cambridge office. He could not be reached for comment.
Zynga’s “Boston” branch, as it has been referred to in national publications, was previously called Conduit Labs before it was acquired by the gaming company in August 2010.
Within hours of the news hitting the Boston-area tech scene, those in the industry gave their condolences.
According to TechCrunch.com, “earlier this month Zynga’s share price plummeted after it reduced earnings and revenue projections for the coming year.” TechCrunch reported that at the time of the announcement, CEO Mark Pincus said there would be “targeted cost reductions” in many areas.
Zynga, a San Francisco-based company, was scheduled to report its latest earnings on Wednesday, October 24. Reports indicate Zynga’s shares have recently taken a significant dip.
BostInno reached out to Zynga for an official response, but we are still awaiting reply.
Zynga is described as the world’s “leading provider of social game services with more than 240 million monthly active users playing its games,” according to the description on the company’s website.
The company is also known for games like “Words with Friends” and “Mafia Wars.”
Below is the statement sent to employees by the company’s CEO, courtesy of Kotaku.com
INTERNAL NOTE FROM ZYNGA CEO AND FOUNDER, MARK PINCUS
Earlier today we initiated a number of changes to streamline our operations, focus our resources on our most strategic opportunities, and invest in our future. We waited to share this news with all of you until we had first spoken with the groups impacted.
As part of these changes, we’ve had to make some tough decisions around products, teams and people. I want to fill you in on what’s happened and address any concerns you may have.
Here are the most important details. We are sunsetting 13 older games and we’re also significantly reducing our investment in The Ville.
We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult.
In addition to these studios, we are also making a small number of partner team reductions.
In all, we will unfortunately be parting ways with approximately 5% of our full time workforce. We don’t take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them.
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.
These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile. Zynga made social gaming and play a worldwide phenomenon, and we remain the industry leader.
Our success has come from our dedication to a simple and powerful proposition – that play is not just something people do to pass time, it’s a core need for every person and culture. We will all be discussing these difficult changes more with our teams and as a company.
Tomorrow, Dave and I will be hosting a post-earnings webcast (details to follow) and next week we will be discussing our broader vision and strategy during our quarterly all-hands meeting. I’m confident this puts us on the right path to deliver on the promise of social gaming and make Zynga into an internet treasure. If you have any immediate questions, I hope you will talk directly with your manager, Colleen, or me.
I look forward to talking with you tomorrow.