Zynga's Mobile Failures Just Cost 520 People Their Jobs

After quietly letting go of 100 people last October, Zynga will lay off another 18 percent of its entire staff, according to a company blog post from CEO Mark Pincus on Monday afternoon.

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After quietly letting go of 100 people last October, Zynga will lay off another 520 people — nearly 20 percent of its entire staff — according to a company blog post from CEO Mark Pincus on Monday afternoon. "Today is a hard day for Zynga and an emotional one for every employee of our company. We are saying painful goodbyes to about 18% of our Zynga brothers and sisters," Pincus wrote in a note that takes an otherwise optimistic tone, considering the circumstances. With this new round of major layoffs, the once and former darling of the tech world's gaming startup moment is hoping to reduce costs and "drastically restructure" a business that has fallen so far its Pincus almost cried to save it, sources tell AllThingsD's Kara Swisher. In addition to letting go of over 500 full-time employees, the destitute maker of Farmville will close both its New York and Los Angeles offices, which will result in $80 million in cost savings.

Despite having just fired so much of his staff, Pincus manages to remain optimistic about the future of not just his company but the people he's sending toward unemployment. "We're offering generous severance packages that reflect our appreciation for all of their work and we hope this will provide a foundation as they pursue their next professional steps," Pincus writes, before getting to the part where the move will help continue the company's "mission of connecting the world through games." He continues: "Although these are hard decisions, I'm confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term. I'm encouraged by our recent progress."

While the very sad $3.41-per-share stock is trading slightly up — about one cent — on the news, Swisher's sources say Zynga had to lay so many people off because its web business has done worse than anticipated, while mobile games haven't exactly come to save the day. So far the "mobile first" strategy hasn't provided a lift, with the Farmville-style social games that made Zynga such a major player in that space failing to translate to phone-only. Hoping to get more people hooked, however, Zynga will invest in so-called "midcore" games, which take more concentration from players than tilling a virtual farm. In a recent earnings call, Pincus claimed midcore titles had "monetization that's running at roughly 15 times what we've seen across our With Friends titles on a per-player basis."

That's got to be (slightly) encouraging for Pincus and his shareholders, but probably not so much to the 520 people who just lost their jobs. But, hey, at least they get a "generous severance" as they head out looking for jobs in that lucrative mobile game-making field, right?

This article is from the archive of our partner The Wire.