Zynga lays off workers, closes Boston studio

24.10.2012
Zynga is cutting about 5 percent of its workforce, and is "sunsetting" 13 of its older games, the company's founder and CEO Mark Pincus said Tuesday in a note to employees.

The games developer is also shutting down its studio in Boston, and may also close its studios in Japan and the U.K., Pincus said in the letter which was also posted . It also plans to cut investment in "The Ville," a game it launched recently, and is reducing staff in its Austin studio. The company is also planning small reductions in partner teams.

The note comes a day ahead of Zynga's quarterly earnings conference call. The company said earlier this month that it expected to report losses for the third quarter ended Sept. 30, and lowered its outlook for the full year 2012.

"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," Pincus said in the note. The overall cost reduction plan also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors.

The reductions, coupled with more stringent budget and resource allocation around new games and partner projects, are expected to improve the game developer's profitability and allow it to reinvest in games and its Zynga network on web and mobile, Pincus said.

On Tuesday, Facebook's CEO Mark Zuckerberg said that gaming on Facebook is not doing as well as he would like. Payments revenue from however dropped 20 percent during the third quarter compared to last year, while revenue from other games grew.