Online gaming company Zynga has announced that they will be laying off 520 staffers, or approximately 18% of its total workforce, in an attempt to trim costs and focus on its mobile strategy. According to the company’s press release, the move is expected to save around $80M in employee costs. Offices in New York, Los Angeles, and Dallas will also be closed. The reduction of 520 employess is said to occur across all job divisions and will be completed come August 2013.
In a memo circulated to Zynga employees, CEO and Founder Mark Pincus wrote “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 multi-platform, which is where social games are going to be played.”
Pincus further emphasized on the memo the importance of mobile for the company’s success in the future. According to him, “These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences.”
Together with the massive layoff, Zynga updated its outlook for Q2 of 2013 to a net loss of $28.5M to $39M, with overall active and daily users down by 13% in the same quarter last year.