Zynga announces massive layoffs, about 18% employees

Beijing time June 4, Zynga, a social gaming firm, announced massive layoffs, with 520 layoffs, accounting for about 18% of its workforce, and closing several offices, including Los Angeles, Dallas and New York.

According to our exclusive knowledge, Zynga's China office also laid off 18% of its staff, from the original 160 to 130 people.

Zynga said the move was aimed at cutting its annual spending by $70 million to $80 million. The Omgpop studio, which has developed a popular game, "You draw my guess" (Draw something), will be completely closed in this reorganization.

The news affected Zynga's stock price, which plunged by 12.03% per cent to a close of $2.99 and is now worth $2.091 billion trillion. Zynga's market capitalisation had previously been as high as $11.5 billion trillion.

With its Facebook platform, social connections and rapid development, Zynga's PC-era social game became the leading player and the most gold-sucking player on the Facebook platform.

Since 2012, however, the world's largest social gaming company has suffered a series of lows. Yong, CEO of the hot game, says the factors that helped Zynga's success have now become a hindrance in its transformation.

Zynga doesn't have much time in front of fickle gamers and investors.

Zynga's business in China is poor

On June 4, Zynga announced that it would cut about 520 employees by August, accounting for about 18% of its total workforce. According to Pincus Mark Ping, a Zynga CEO, the total cost of the job cuts will be $80 million trillion for the company. It was linked to a 15% per cent fall in Zynga's shares on the same day, closing down 12% and closing at $2.99. Zynga's initial IPO price was $10 trillion.

In the first quarter of 2013, Zynga reported a total revenue of $263.5 million trillion and a net profit of $4.1 million, better than analysts had expected, but diluted earnings per share was almost nil., and its share price fell 11%.

"In the past, our staff size was an advantage, allowing businesses to take the lead in social gaming services, but now the sheer size of the workforce is not the advantage of mobile and multiplatform strategies." ' And that's why it's hard for us to take the lead in the mobile and multiplatform strategies, ' he said in a letter to all staff. ”

"China has not been laid off since its inception. "An unnamed Zynga employee told reporters that China's regional office has cut 30 employees, leaving only 130 people."

Zynga has been laying the Chinese market since 2010, but has been looking for a suitable platform in China because of the lack of opportunities in China based on the Facebook platform. It is understood that Zynga early with Sina micro-blog launched a web version of "You guess I draw", later with Tencent Weibo launched the "Star City" and other games.

The chess game War of Fallen, developed by the Zynga China team, has been published in the Global App Store. Previously, the chess game "Supernatural Yin-Yang Road", which Zynga cooperated with Japanese studios, hit a new high after its launch in China.

The former Zynga employee told reporters that the current Chinese district only "mysterious Yin and Yang Road" to make money, other games are not without the headquarters of the audit is closed, the current Zynga in China's online games are "to the Japanese arena", "Stone of War" and "The Fallen war" and other games, but the performance is not hot.

Zynga's transition

It is understood that Zynga has been very pessimistic about its business since it decided to reduce its reliance on Facebook. Zynga's recent frequent closures of games, frequent layoffs and closures of studios have been widely criticized. It is reported that Zynga had laid off 150 employees last fall and closed its Japanese office this January. In the past six months, Zynga has eliminated about 18 games.

Analyst Shillon told reporters that Zynga's rapid growth in recent years, after the expansion of the new products can not continue to support.

Chengye Xiao, who has been a leader in social gaming with Facebook, is now in the doldrums because of Facebook.

"Too attached to Facebook is also a weakness, and Facebook's user growth slows the overall business will also be affected." Shillon says Zynga China is mainly developing games for the global business and has no products specifically for Chinese business.

Hot-Cool CEO Yong that Zynga had relied on Facebook to do viral marketing, and that when it came to mobile games, the marketing short boards of various channels were becoming more and more evident. Hot game is also a social game before the game research and development operators, its release of the Star Hand Tour products "Find your Sister" is very popular.

Yong that Zynga's strategic transformation was late and incomplete. It is understood that before the CEO Ping-Cass came to China, said this year, in addition to more investment in the game development, will strengthen cross-platform, while the PC and mobile end coverage. In China, Zynga's games generally don't make money, according to the company's employees, and the current profitable "Supernatural yin and Yang Road" is a mobile-side game.

"Zynga pays too much attention to casual games, and the short cycle of mobile-end casual games is not sustainable, and it needs to move closer to the cards and the medium-level games." Yong said that the current hot cool is not only leisure games, but also began to issue a medium card game "famous" and other products.

As of March 31 this year, Zynga had cash, cash equivalents and negotiable securities of about $1.67 billion, and CEO Ping-Cass said 2013 would be a "investment and transition Year" for Zynga.

But in terms of mergers, Zynga has done poorly. In the past year, Zynga has bought a series of companies such as video game developer Buzz Monkey, social game developer Omgpop, and game developer a Bit lucky, a Facebook platform, but it does not seem to be doing well at the moment. More seriously, Omgpop was completely shut down in the restructuring.

In recent years, the popular social game has gradually faded out of the user's vision. May 14 this year, Japanese social game giant Gree Chinese company announced the withdrawal of China, more than 130 employees were unemployed. Yong believes that social gaming companies will need to focus on launching the best products on the mobile side, rather than being distracted by other types of games, and doing the marketing of mobile games locally.