Zynga has announced today that over 18% of its staff has been found redundant, laying off an estimated 520 employees and closing the company's Austin, Dallas, Los Angeles and New York studios. Due to the breadth of the layoffs, Zynga has frozen trading of its stock on NASDAQ. The company's updated financial outlook includes a $28.5 to $39 million loss in the second quarter.
Zynga Founder and CEO Mark Pincus offered the following works on what must be a terrible day for all parties involved:
"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."
Pincus' full letter can be read on Zynga's blog, in which he quickly turns from apologies to promises of a strong future for the company.
Zynga's year has gone from bad to worse, despite offering raises to their top executives in the hopes that they'd stay with the company just a few months ago. The company offered stock options to staff in hopes to retain them last August, laid off 5% of its work force last October, shut down CityVille and two other games in February, and continue to face legal battles like The Ville/The Sims Social case with EA. Will Zynga's future be as grim as its past?
We at Neoseeker wish, as always, the best of luck to those now in between jobs. With our industry's support, hopefully you'll each be back on your feet and working on a project you're passionate about before long.