As Zynga stretches and trims to save money, the company has elected to layoff 18 percent of its staff. That amounts to 364 people.
The word comes from an official release announcing Zynga’s first quarter 2015 financial results. The company beat the earnings outlooking with $167.4 million made, but they’ve elected to cut costs where they can.
The same statement announced their “100M COST REDUCTION PROGRAM.” Here’s a bit about what they have planned for the company in light of this decision.
…Zynga expects to complete a reduction of approximately 18% of our current workforce across its studios, including contractors, and implement additional cost reduction measures, including lowering costs and eliminating spend on outside and centralized services. Zynga expects the workforce reduction to be complete in the fourth quarter of this year and generate approximately $45 million in annualized savings. Zynga expects the reduction in centralized services costs and spend to be complete by the third quarter of 2016 and generate approximately $55 million in annualized savings.
CEO Mark Pincus (co-founder, CEO before Don Mattrick’s stint and CEO once again) offered this in regards to the cuts and cost reduction program in the release.
“For our people, we need to create an empowered, entrepreneurial culture that fosters more creativity and innovation. Over the years we’ve seen that tighter, more nimble teams can drive faster innovation and deliver more player value…
…As a result, today we announced a cost reduction program to focus, simplify and align us against our most promising opportunities. We expect these cost reductions to generate $100 million in annualized savings. We are reducing our workforce by 364 people or approximately 18%, decreasing our outside services and reducing our central functions. This was a hard but necessary decision and I believe this plan puts us in the best long term position for success.”
As the mobile gaming world continues to over-saturate and the Facebook gaming world declines, Zynga’s going to need to come up with some new approaches to making and selling games. Simply sticking to the plan while cutting costs and staff isn’t going to do it.
Best of luck to those without work. Hopefully you all land on your feet quickly.
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