Zynga to Lay off Over 500 Employees by August

[Shawn Zipay]

In an effort to cut roughly $80 million in staff costs, Zynga is laying off 18% of its workforce by August. That 18% represents about 520 employees, a rather substantial figure given that the studio currently employees 2,900 staff.

In addition to laying off the employees, the company will shut down offices in New York, Los Angeles, and Dallas. These closures, when combined with the layoffs, are expected to save the company far more than the $80 million they will save from the staff layoffs alone.

Sources said the reason for the more substantive cuts now, after earlier ones last fall, is because the decline of its Web business has been more drastic than anticipated, while the rise of its mobile business has been slower than needed. That’s been especially true on Facebook, which was once one of Zynga’s key money-making partners.

It has resulted in a perfect storm of trouble for Zynga, which has struggled with its business since its public offering, as investors have scrutinized the longevity of the hits-based online gaming business. Despite the continued strength of some of its flagship properties, such as FarmVille, the life cycle of most casual games has been short.

(via All Things D)

[nemes1s3000]

It's inevitable for something like this to occur once a company runs out of ways and methods to steal ideas from other companies.

[cikame]

That's a hell of alot of staff they employ, damn.