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Zynga to shed 15 percent of its staff amid losses and decrease in players
Zynga to shed 15 percent of its staff amid losses and decrease in players
January 30, 2014 | By Christian Nutt

January 30, 2014 | By Christian Nutt
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More: Social/Online, Business/Marketing



Today, Zynga announced its full year 2013 results alongside news that it plans to dramatically decrease its workforce as part of newly installed CEO Don Mattrick's recovery plan for the company as it sees financial losses and a dwindling player base.

As part of a cost reduction plan designed to save the company between $33 and $35 million, Zynga plans to lay off approximately 314 employees -- 15 percent of its current workforce -- this year.

At the same time, Zynga announced it acquired mobile game and tech company NaturalMotion for $527 million. That company has 260 workers worldwide.

Zynga also announced that it made a $25 million loss for the fourth quarter of 2013, as it shed millions of players.

According to the company, its monthly unique players declined in the fourth quarter from 2.9 million to 1.3 million year-over-year, and despite having three of the top 10 games on Facebook -- FarmVille 2, Words With Friends and Zynga Poker -- it lost 16 percent of its players, or 300,000, from the prior quarter. The company still has an army of players, however, boasting daily active user counts of 14 million and 13 million on web and mobile, respectively, for the fourth quarter of 2013.

The company's net loss for 2013 overall was $37 million. The good news is that this is down from a loss of $209 million the year prior.

The company is projecting a much bigger loss for the first quarter of 2014: $56 million to $49 million. Still, CEO Don Mattrick said in the earnings statement, "We... expect 2014 to be a growth year. We believe that Q1 will be a solid foundation for that growth and we expect substantial improvements for the remainder of the year..."

UPDATE: The market appears to like this news. In after-hours trading, Zynga's stock shot up around 20 percent. As of this writing, it sells for $4.25 a share.


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Comments


Eric Harris
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This is a shame. So much money being lost here. I hope they don't continue to fumble and end up busting the mobile games bubble.

TC Weidner
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ah I remember the good ol days when companies actually had to make money to exist, Gee I miss those days. Internet Bubble 2.0 among all the other bubbles happening.

Merc Hoffner
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Feel good about that $50 million Mattrick money now? http://www.gamasutra.com/view/news/195578/

Quite a contrast - bigger bucks to buy a new CEO than to keep workers at Zynga, while the CEO takes a pay cut and keeps workers at Nintendo.

Kris G
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It seems strange to me to announce major layoffs at the same time you go on a spending spree.

Kaitlyn Kaid
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Interesting that this article is posted right above this one: http://gamasutra.com/view/news/209708/Zynga_makes_big_mobile_play
_with_527_million_NaturalMotion_acquisition.php

Half a billion out the door, along with 15% of the staff...

Jane Castle
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Zynga = Chapter 11 bankruptcy in about 3 years....


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