Feeds

Zynga deactivates 500+ employees in major layoff

18 per cent of workforce begin to play 'find jobs' game

Secure remote control for conventional and virtual desktops

Online gaming company Zynga is getting rid of 18 per cent of its staff so its remaining employees can have enough resources to stay alive in a mobile device–led world – or so their CEO says.

The FarmVille and DrawSomething gambling gaming company announced plans to get rid of over 500 people on Monday in a memo from its Harvard Business School MBA–equipped chief Mark Pincus.

In an impressive instance of corporate "what goes up, can't go down" thinking, Pincus wrote: "None of us ever expected to face a day like today, especially when so much of our culture has been about growth."

Speaking as one employee who is keeping his job, Pincus continued, "The impact of these layoffs will be felt across every group in the company. But I think we all know this is necessary to move forward."

Zynga is sacking its staff – "reducing our cost structure" – to give the remaining employees "the runway they need to take risks and develop these breakthrough new social experiences," Pincus wrote.

No, we don't understand what that means either.

"Although these are hard decisions, I'm confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term," Pincus wrote.

The sackings may not come as a surprise to longtime Zynga watchers, as the company had reported poor results in Q2 of this year, and Pincus had described 2013 as a "transitional year" for the company.

Zynga, like every other consumer-oriented company, has been adversely affected by the rapid shift to mobile, as business models built for the desktop era have a hard time dealing with the lower ad fees generated from mobile devices.

What could be worsening Zynga's plight is its much talked about shift last year away from hosting its games on the AWS cloud into a pricey custom infrastructure it called "the Z-cloud", which saddled the company with a pile of IT gear that, in these times of falling users, could represent massive underutilization of capital assets.

One way the giant has been trying to stanch the loss of money is to branch out into what it terms "real-money gaming," and what everyone else just calls gambling. Given the historical success of lotteries during recessions and periods of economic stagnation, that at least looks like a sure bet, given the current climate. ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
Lords take revenge on REVENGE PORN publishers
Jilted Johns and Jennies with busy fingers face two years inside
Yes, yes, Steve Jobs. Look what I'VE done for you lately – Tim Cook
New iPhone biz baron points to Apple's (his) greatest successes
Happiness economics is bollocks. Oh, UK.gov just adopted it? Er ...
Opportunity doesn't knock; it costs us instead
Facebook pays INFINITELY MORE UK corp tax than in 2012
Thanks for the £3k, Zuck. Doh! you're IN CREDIT. Guess not
Ex-US Navy fighter pilot MIT prof: Drones beat humans - I should know
'Missy' Cummings on UAVs, smartcars and dying from boredom
Sysadmin with EBOLA? Gartner's issued advice to debug your biz
Start hoarding cleaning supplies, analyst firm says, and assume your team will scatter
Edward who? GCHQ boss dodges Snowden topic during last speech
UK spies would rather 'walk' than do 'mass surveillance'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.