It seems like things are not going exactly well for online social gaming giant Zynga which not only saw another share price decrease, but had to make five percent of its workforce redundant and close offices in the UK and Japan.
This was confirmed by Zynga CEO Mark Pincus, who specified that 2,850 people had to be let go, and described the cuts as "the most painful part of the cost-reduction plan". He also stated that spending on data hosting, advertising and outside services from contractors is also being cut down in order to “streamline our operations, focus our resources on our most strategic opportunities, and invest in our future.”
Many of the layoffs were made in the US, 100 of which were anticipated in the Austin, Texas office alone.
In addition, the company said 13 of its game titles will go to history. However, it still plans to keep pursuing its real money online poker plans and go live with them in the UK next year.
In the meantime, Zynga’s performance is dropping, not only in terms of its share price, but also in term of its contribution to Facebook’s revenues – according to Facebook chief Mark Zuckerberg, Zynga participated with just 7 percent of Facebook’s latest quarterly revenues, which is three percent less than in Q2-2012.
He also added that average user spend on Zynga games via Facebook had dropped by 20 percent even though there’s a significant upward trend of around 40 percent among other developers.