Zynga to lay off 5 percent of workforce

In addition to layoffs at its Austin studio, the gaming company is closing its Boston studio and plans to close studios in Japan and the U.K. as well.

Donna Tam Staff Writer / News
Donna Tam covers Amazon and other fun stuff for CNET News. She is a San Francisco native who enjoys feasting, merrymaking, checking her Gmail and reading her Kindle.
Donna Tam
2 min read
Zynga CEO Mark Pincus. James Martin/CNET

Zynga, the social-gaming company, is laying off 5 percent of its employees and shutting down its Boston office with plans to also close its U.K. and Japan studios.

Zynga CEO Mark Pincus told his staff the news in a memo sent out today. The action affects roughly 140 of Zynga's 2,800 employees.

"We don't take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them," he wrote. "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."

In addition to the Zynga Boston closure, Pincus wrote that the company is proposing the closures of Zynga Japan and U.K. Zynga is also laying off staff in Austin, Texas. A report earlier today indicated there would be as many as 100 people laid off, but Zynga has not confirmed the number.

In addition to those layoffs, the company is "making a small number of partner team reductions," Pincus wrote, and shutting down 13 older games and "significantly reducing" its investment in The Ville, which did not perform as well as expected.

As Pincus mentioned previously, the company plans to funnel its resources to new games and projects with partners, which points to Zynga's plans to focus more on becoming a gaming platform versus a game developer. Zynga has been partnering with more third-party developers that are launching games on its platform.

The news comes on the eve of Zynga's third-quarter earnings report. The company has had a rough six months and recently lowered its expectations for the quarter.