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Zynga Closes Boston Studio as Layoffs Hit 5% for the Company

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  • Zynga Closes Boston Studio as Layoffs Hit 5% for the Company

    Roughly 5% of the entire Zynga work force was let go today after word started to spread that the company shut down their Boston studio and let go of a number of people from their Austin studio. In addition, the company is considering closing its studios in Japan and the UK.

    In a letter sent to the remaining employees, CEO and founder Mark Pincus details the firings.
    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.

    For the year, Zynga's stock prices have already plummeted 76% compared to last year's figures, coinciding with huge financial losses we reported on earlier. It was also revealed that ad revenues from Zynga games on Facebook have been on the decline.

    Feel free to read the full letter from Mark Pincus below.

    [spoiler=Letter to remaining employees]Team,
    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.

    Mark[/spoiler]
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