Social games firm Zynga has announced a massive layoff round, which will see the company axe nearly one fifth of its work force.
The company said that it will be dropping some 18 percent of its staff, an estimated 520 employees in what management says will be a shift in focus towards the mobile market. The company said that the cuts will impact all areas of business.
Chief executive Mark Pincus said in a letter to employees: “None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward.
“The scale that served us so well in building and delivering the leading social gaming service on the web is now making it hard to successfully lead across mobile and multi-platform, which is where social games are going to be played.”
Zynga, which produces games primarily for use with social networks and is supported by ads and micro-transactions, has long been seen as a bellwether for the social networking space and an indicator of the direction of the larger market.
The company's has struggled since its 2011 IPO fell short of expectations, a crisis that was only made worse when Facebook's own public offering flopped and dropped Zynga stock by 13 percent in one day.
Now, the company hopes that its cuts will help to for the basis of a reorganisation effort that will help Zynga bounce back as a touch and mobile-centric developer.
“Mobile and touch screens are revolutionising gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect,” said Pincus.
“By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences.”
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