Zynga said to fire more than 100 employees

Gamasutra reports that employees in Austin, Boston and Chicago are affected, and that some games may be shut down.

As most of the tech world had its eyes turned toward Apple's event in San Jose, Zynga was reportedly laying off staff members across the country.

Zynga

Gaming site Gamasutra said it spoke with an employee who confirmed that more than 100 employees were laid off from the company's Austin development studio, developer of new game "The Ville." It said it also heard that Zynga shut down its Boston studio, responsible for Indiana Jones Adventure World, and that "there is similar bad news in Chicago."

Zynga is expected to report its earnings tomorrow amid vastly diminished expectations for the once red-hot startup.

The San Francisco-based company has had an awful six months replete with underperforming games, a plummeting stock price, and an exodus of high-level executives. Today the company is rumored to be working on a new advertising platform to help stop the bleeding. But it seems that the company has also decided that it needs to rein in spending in a hurry.

CNET has contacted Zynga for comment and will update this post when we hear back.

Update: CNET has now obtained the internal memo confirming that 5 percent of the workforce has been eliminated. That includes the closure of the Zynga Boston studio and additional studios in Japan and the United Kingdom. It also confirmed layoffs at the Austin studio but said it would not close.

"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," Zynga CEO Mark Pincus said in the memo.

Zynga also said it would "sunset" 13 older games and scale back its investment in the Ville.

 

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