In all the noise created by today's Apple event, Zynga attempted to quietly lay off 100 people without anyone noticing. Kind of like a Friday afternoon news dump, but with new iPads. Unfortunately for them, it didn't work.
The Next Web's Ken Yeung reports that more than 100 people were laid off in Zynga's Austin office. The news was first leaked on Twitter by designer Justin Maxwell. The team behind The Ville has been laid off and the game itself is being discontinued. TechCrunch's Josh Constantine reports that about a third of the Austin office remains, and that mobile teams are mostly safe. If you work for Zynga's San Francisco office, you're safe too.
Gamasutra is also reporting layoffs from Zynga's Boston office, however. Ian Miles Cheung writes that the decision was made to do this during the Apple keynote in order to avoid bad press. The layoffs were fairly nasty, too. Per Cheung, Zynga only gave the employees, many of them two-year office veterans, two hours to clean out their things and turn over their computers, phones, and security badges.
Yeung points to the recent copywright infringement lawsuit from Maxis, the maker of The Sims franchise, as the reason for the downsizing. Maxis alleges The Ville was made with secrets outgoing Maxis employees took with them when they jumped to Zynga.
Despite the apparent intentions of the company, not only did every tech journalist notice the layoffs, so did Zynga's stock price. It's down 4 percent already. It's been a rough few months, what with the disastrous second-quarter earnings report and the high profile "restructuring" that followed. There's also the aging-like-a-fine-wine tech scheme that was the Zynga sale. At the beginning of the year Zynga's stock was on top of the world and trading around $14 a share. Now it's $2 and some change. Schadenfreude! We're waiting for an official comment from Zynga, and will update if we hear more.
UPDATE: Things are pretty bad at Zynga, apparently. CEO Marc Pincus sent out a memo to his employees this afternoon, and we've cribbed the most important parts here:
We are sunsetting 13 older games and we’re also significantly reducing our investment in The Ville.
We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult.
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.
By his math, the number of layoffs would be approximately 150 people. The shuttering of the Boston office adds to the gutting of the Austin office, and we can't imagine the employees in Japan and the UK sticking around after their offices are shut down, too. They'll either be asked to work from home, or worse, move. This is all the day before Zynga's own third quarter earnings call. The memo talks about "streamlining" and the need to "implement more stringent budget," which leads us to think tomorrow's report might be ugly.