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Techie News | July 10, 2014

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FarmVille Developer Zynga Cuts Five Per Cent of Staff and Announces Studio Closures

Social gaming giant Zynga, the company behind hits such as FarmVille, ChefVille and Mafia Wars, has announced major layoffs and studio closures. Reports say that the games developer has cut over 100 members of staff (roughly 5 per cent of its total workforce), including the entirety of its Boston Studio. The company has also cut staff at its Austin studio and its UK and Japan studios also face closure.

Zynga mostly develops games for social media such as Facebook. Typically, Zynga games are free to play, with players having the option of paying for in-game assets to improve their playing experience.

In an internal email to employees, Zynga CEO and founder Mark Pincus said the decision was part of an “overall cost reduction plan.”

As well as these staff cuts, Mr Pincus also stated that the company would be “sunsetting” 13 older games in order to reduce running costs and that they would be reducing their investment in The Ville. The Ville was released four months ago and was developed by Zynga’s Austin office, one of the studios affected by the redundancies. The game is the subject of a copyright infringement lawsuit, with Sim City published Electronic Arts claiming that it copied their new game, The Sims Social. Zynga Boston (formerly Conduit Labs) was acquired by Zynga in 2010 and is notable for creating the Indiana Jones Adventure World Game.

In his internal memo, Mr Pincus said: “We don’t take these decisions lightly” and thanked the affected staff for their “amazing contribution” to the company. “We recognise the impact to our colleagues and friends who have been on this journey with us” he said.

These closures add to what has already been a bad year for Zynga. As well as EA’s copyright lawsuit, the company faced a similar lawsuit earlier this year from game developer NimbleBit for copying its highly successful Tiny Tower game with Dream Heights. The company has faced further legal action for insider trading after Mark Pincus and other executives sold $500 million in stock ahead of disappointing Q2 financial results. Zynga has also seen its share prices fall from $13.39 in February to just $2.27 this month and lost several key executives over the summer.

It remains to be seen whether this downsizing can rescue the fortunes of Zynga.

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