Zynga cuts five percent of workforce, reduces investment in The Ville

Zynga CEO Marc Pincus

Zynga confirmed today that it has cut its workforce, reduced investments in games like The Ville, and closed Zynga studios, CEO Mark Pincus wrote to employees in an email today. The news marks significant reductions in staff and scope as the social gaming company weathers a rough period in its finances.

Pincus said Zynga would cut 5 percent of the company’s workforce, reducing staff levels in Austin, and closed the Zynga Boston studio. He also said they would consider closing Zynga offices in Japan and the United Kingdom.

The company has seen stock plummet, and it recently lowered expectations for the rest of the year, writing down its investment in OMGPOP and acknowledging disappointing results so far this year.

Pincus explained the changes to staff in an email today, which is posted on the company’s blog:

In all, we will unfortunately be parting ways with approximately 5% of our full time workforce.  We don’t take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us.  We appreciate their amazing contributions and will miss them.

This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors.

These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile.

Zynga will be reporting its quarterly earnings on Wednesday, and Pincus said he would participate in a post-earnings webcast to discuss Zynga’s broader future.

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