Zynga has been forced to close several of their studios and lay off a large number of staff in the wake of declining profits.
Big-time mobile and social gaming developer Zynga has been struggling to stay afloat ever since late last year when they were forced to shut down a large handful of their games and let go of roughly five percent of their employees. Now things have gone from bad to worse as the company has been forced to close down several of their studios and lay off an even larger chunk of their work force.
Zynga sent out a press release yesterday confirming the closing of their studios in New York, Austin, Los Angeles, and Dallas. They’ve also laid off 520 employees; about 18% of their total workforce in the wake of the studio closings. These closings come on the heels of severe financial woes that struck the company back in February and the subsequent lawsuit filed in April by an ex-employee who claims that company executives knew about the February losses beforehand and, instead of warning the rank-and-file employees, chose instead to dump their stock in the company; making millions while other shareholders were left stuck with near-useless shares.
A letter from Zynga CEO Mark Pincus was sent out to the remaining Zynga staff today, bringing even more disheartening news: as drastic as the staff cuts have been so far, they’re not yet over. According to Pincus, Zynga will continue laying people off through August, 2013. The full letter can be read on the following page.