Zynga cuts 5pc of workers during Apple press event

24 Oct 2012

If you’re a tech company in trouble, a good time to break bad news might be during an Apple press event. While the tech press were ogling Apple’s latest gadgets yesterday, Zynga quietly shed 5pc of its workforce ahead of its Q3 financial results announcement today.

Twitter user Justin Maxwell first broke the news online on behalf of friends of his in Zynga’s Austin, Texas, office. According to Maxwell’s tweet, more than 100 employees were let go while the Apple event was taking place, which would have been after 12pm in Austin.

Though it has not yet been confirmed how many were let go in Austin, it has officially been announced that the online gaming company is cutting about 5pc of its full-time staff and dropping 13 games. The company currently has 18 studios worldwide, but this number is also set to change with the Boston office closing up and proposals to do the same with studios in Japan and the UK.

This is the first time Zynga has taken to cutting staff and comes before the company prepares to release its third-quarter financial results today. It has been predicted that the company will report a loss of US$90m to US$105m.

“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,” said the company’s founder and CEO, Mark Pincus.

While Zynga owns some of the most popular games on Facebook, its revenue has been dropping as popularity in its games decreases. In response to this, the company plans to significantly reduce its investment in The Ville, which was released earlier this year.

Elaine Burke is the host of For Tech’s Sake, a co-production from Silicon Republic and The HeadStuff Podcast Network. She was previously the editor of Silicon Republic.

editorial@siliconrepublic.com