Zynga, the social gaming company that has seen its fortunes slide over the last six months, announced cutbacks Tuesday just before what promises to be a dismal earnings report. The retrenching includes the dismissal of about 5 percent of Zynga's work force, or 150 people, and the closing of 13 older games.
“We've had to make some tough decisions around products, teams and people,†Mark Pincus, Zynga's chief executive, said in a note to
employees that was released by the company.
The company is closing its Boston development studio and sharply reducing its staff in Austin. In addition, it plans to shutter studios in Japan and Britain. In another cost-saving move, it also intends to advertise less. The company declined to list the games it was closing because it said it wanted to tell the players first. Most Zynga games are played on Facebook.
Like other tech companies, Zynga is seeing its users quickly migrate to the mobile Internet, a transition that requires a new business strategy. But Zynga also has some problems particular to itself, including a paucity of new hits. In many ways, Zynga is equivalent to a Hollywood studio - not among the most predictable of ventures.
Zynga will announce its quarterly results on Wednesday. The company has already warned that they will be bad. The stock, which fell 5 percent Tuesday, rose 4 percent in after-hours trading on news of the cutbacks. Since the company's public offering last winter, share are down about 75 percent.
