17 ms·

Zynga to Lay Off 520 Employees and shutter NY and LA Offices

408 points by _pius 13y ago

JunkDNA 13y ago
I have only passively been paying attention to Zynga. I do feel bad for people who are now out of work. However, the staggering thing about this article to me was that 520 people only represents 18 percent of their employees. That means that after this, there's an astonishing 2300+ people still working on Farmville and friends. Coming from a nonprofit biomedical research group where I struggle to get single digit numbers of developers, that is mind-bending.
- S4M 13y ago
  Funny because I have in the past applied for jobs in such companies, but I never got an answer, and now I work for a company similar to Zynga.
- Androsynth 13y ago
  your nonprof biomedical group didnt have kleiner perkins pushing it towards an ipo ;)
  - ttrreeww 13y ago
    Ah, but the IPO already happened so it's time to lay them off.
- pvnick 13y ago
  Hey JunkDNA, I was hoping to learn a little more about what you do and your field. I'm going to be graduating soon with a bachelors degree in biochemistry, and I would consider myself a fairly competent developer, so I'm looking to start doing some real scientific work soon beyond just vanilla software development. From your standpoint, what does the biomedical landscape look like and what kinds of things would developers be focused on? My email is pvnick@gmail.com if you'd like to talk. I look forward to hearing from you :)
bob13579 13y ago
Stock halted. Bracing for a crash. This will be bad.
- bdcravens 13y ago
  I'm seeing that trading will resume at 3:25 pm ET (in about 10 minutes from time I'm writing this). Grab your popcorn!
- derwiki 13y ago
  This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?
  - deleted 13y ago
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  - chollida1 13y ago
    Stocks get halted all the time. Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility. What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news. In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes. This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.
  - jarcoal 13y ago
    It often happens after huge news, and it's meant to give investors time to digest it. I believe the last notable instance was after Jobs died, AAPL was halted.
    - chollida1 13y ago
seiji 13y ago
A good reminder to not get stuck in local fad maximums. Remember when the future of every single company was gamification or bust? Remember when the seemingly only viable business model was skinner boxing rube middle america housewives with no self control (oddly, middle eastern princes also would spend tens of thousands a month on those silly in app purchase games, except they can afford it and don't have their lives ruined with addict-induced credit card debt)? I don't have a point. Just notice how the "tech press" and fads and media sweeps through in its ever-shortening attention span to the point where they aren't good signals for anything anymore.
- pekk 13y ago
  Empty, derivative Facebook games are not any more "skinner box" than anything else we either enjoy or do out of necessity. Almost any game ever created could be described as a "skinner box." Completing work units for a salary could be described as a "skinner box." If there is something especially bad or manipulative about Facebook games, it isn't that they are a "skinner box."
  - jbooth 13y ago
    Chess isn't a skinner box, neither is Solitaire or Skyrim. Even poker is less of a skinner box than the games we're talking about.
  - boot 13y ago
    Hm. I'm not talking scientifically here or anything, but I've always felt the lack of any kind of depth in most Zynga games makes them feel very skinner box with little pretense beyond that. Most games have complicated stories or game play mechanics. Many Zynga games seem to be "Fill up these three bars by clicking these buttons. Watch them fill. It feels good doesn't it." Personally I couldn't say that about many other games/work.
  - angersock 13y ago
    No, they very much are a skinner box. Read any good tutorial or paper in the field (say, http://www.fdg2013.org/program/papers/paper06_zagal_etal.pdf http://www.fdg2013.org/program/papers/paper06_zagal_etal.pdf ). The revenue model depends on base applied behaviorialism.
soup10 13y ago
With respect to employees that have lost their jobs. Good, fuck Zynga.
untog 13y ago
Boy does this suck for Zynga employees. I really feel for the former OMGPOP employees as well- looks like Zynga has taken them down with them. I know that OMGPOP were desperately short of cash themselves, but at least they were the masters of their own destinies. EDIT: and I wouldn't be too smug about their downfall if I were you. There could be repercussions across the tech sector if Zynga totally fails.
- gfodor 13y ago
  Why? I felt bad for Zynga employees who got screwed earlier since that was the first breach of trust by their CEO and it was still unclear if Zynga was something other than a game-copying exploiter of economically disadvantaged people through game mechanic trickery. But now, after all the dirty laundry has been aired? edit: Any repercussions for the tech sector if Zynga fails will fall in the "healthy correction" column in my book.
  - pyoung 13y ago
    I would assume that he is referring to the possibility of a confidence crash in tech companies that would affect public markets. Personally, I don't think Zynga is widely held enough for it to have much of an impact, and as you mentioned, the dirty laundry has already been aired.
    - gfodor 13y ago
      Yeah, I think Zynga failing would have to be coupled with at least a few other non-social-gaming related companies for there to be any market-wide implications due to capital shifting. edit: honestly if you are worried about market-wide implications wrt ZNGA the stock, if they ousted Pincus and started fixing the company then the short squeeze and the subsequent margin calls would probably be more of concern than the stock cratering, which is what most people expect.
    - bennyg 13y ago
      I agree. If somehow Facebook plummeted and bankrupted it would absolutely raise doubts about the tech sector. 1/7 of the world can't use a service it trusts any more is a big deal.
programminggeek 13y ago
I feel really bad for the employees getting laid off, but this feels a lot like a company that assumed growth would be forever up and to the right without leveling off or declining. Maybe when you go from zero to hundreds of millions of dollars in revenue it's easy to feel that way, but I don't see a place where Zynga is going to ever grow very rapidly again like in the "good old days"
- cwh 13y ago
  as a former Zynga employee, i'm pretty sure the entire management team knows what they are doing, and have expected this for quite some time.
  - deleted 13y ago
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  - wilfra 13y ago
    What would you predict Zynga will look like in a year? In five years? Do you think these layoffs are a good or bad thing for the future of the company?
    - cwh 13y ago
      I truly hope this is a "cut once, cut deep" action. There are still a ton of extremely smart people at the company, I just hope they stop overreaching.
  - deleted 13y ago
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x0x0 13y ago
Good thing Pincus sold off a bunch of stock [1] -- $190mm worth [2]. Even better, he sold it before the employee lockup expired [3]. Living like a boss == fuck you money in the bank, instead of locked up in a company like suckers (employees and investors). From the stock charts [4], it looks like it closed opening day at $9.50, Pincus and insiders dumped at $12, and if you're a regular employee w/ a 6mo lockup that presumably expired 16 Jun since the company opened 16 Dec 11, you've never seen a price higher than $6. ps -- dear employees and investors: your ceo dumping big blocks of stock is probably a negative signal [1] http://online.wsj.com/article/SB10001424052702304724404577299372042231462.html http://online.wsj.com/article/SB1000142405270230472440457729... [2] http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-keeps-crashing-but-mark-pincus-is-having-a-great-year/ http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-kee... [3] http://www.huffingtonpost.com/2012/07/31/zynga-insider-trading-lawsuit_n_1724410.html http://www.huffingtonpost.com/2012/07/31/zynga-insider-tradi... [4] http://www.google.com/finance?cid=481720736332929 http://www.google.com/finance?cid=481720736332929 updated to include pricing. Again, selling at 2x your employees == living like a fucking boss.
- perryh2 13y ago
  Woah -- I did not know this happened. Thanks for taking the time to provide sources.
- antonius 13y ago
  Completely agree with you on this. A CEO dumping a large amount of stock is usually (but not always) a sign of bad things to come and sends a negative signal to the market.
  - snorkel 13y ago
    ... but exec share dumping is not unusual and happens like clockwork at most companies despite market conditions. Typically execs sell off their shares on a preset schedule, they sell as much as they can as soon as they can because of the bird in hand and all that. The truly evil execs are those that sell-sell-sell as much as they can while telling their employees to hang onto their shares and wait.
gaius 13y ago
Whatever happens - Pincus will do alright for himself.
- gyardley 13y ago
  He's already done alright for himself, because he was wise enough to take money off the table when he had the opportunity to do so. What I don't understand is why he's still at it. This must be an enormously stressful time. Why wouldn't he take the rather impressive amount of money he's already made and just go enjoy his life? Evidence, I suppose, that some of us are just wired differently.
  - zenith2037 13y ago
    Some captains refuse to leave their sinking ship.
    - Helpful_Bunny 13y ago
      Zynga might have some fairly tight contractual obligations to Facebook as part of being a preferred content maker on their platform. Worth investigating, if you're interested in this business.
  - gaius 13y ago
    For certain values of "wise" and "opportunity", sure: https://news.ycombinator.com/item?id=5815128 https://news.ycombinator.com/item?id=5815128
  - roc 13y ago
    > "This must be an enormously stressful time." If he's already taken (a lot of) money off the table, what's there (for him) to be stressed about?
    - gyardley 13y ago
      You might be different, but I've always found firing employees and/or not meeting expectations pretty stressful, no matter what my personal financial situation.
bosch 13y ago
It's unfortunate such an ethical CEO as Mark Pincus has to go through troubles such as this. This is also a reminder that only very few companies caught up in the bubble have real business models that will last when the bubble pops.
- smallegan 13y ago
  If you read the comment above: https://news.ycombinator.com/item?id=5815128 https://news.ycombinator.com/item?id=5815128 You have to wonder how ethical he really is?
  - Cookingboy 13y ago
    I'm sure he was being sarcastic
    - smallegan 13y ago
      You are probably right but for some reason I guess I missed the sarcasm. I haven't followed Mark Pincus so I wasn't sure and this isn't reddit so I guess I'm just used to people being more sincere.
      - bosch 13y ago
        Normally, I would definitely be serious and more technical. However, the fact that Pincus is one of the biggest scammers out there and people still: 1) Believe him 2) Invest in his companies 3) Work for him, leads me to be a little sarcastic. It's hard in this day and age with information overload to see people still getting involved in pyramid schemes and wanting to buy snake oil.
- james33 13y ago
  This is sarcasm...right?
- bosch 13y ago
  Yes, I was being sarcastic. Sorry, I thought everyone knew what a douche Pincus was: (and this is just ONE example): http://techcrunch.com/2009/10/31/scamville-the-social-gaming-ecosystem-of-hell/ http://techcrunch.com/2009/10/31/scamville-the-social-gaming... Sidenote: Does HN stop editing after a certain timeframe? I can't find a link to edit my original comment to add this.
ahi 13y ago
Stock trading halted after this was published? Did this article beat a planned press release to the punch? If you traded this news you might have had a good day.
ry0ohki 13y ago
Based on the article, assuming the $80 mil in savings was over 1 year, that means the average Zynga employee costs $153k per year.
- sdoowpilihp 13y ago
  By the time you add in overhead costs (rent, those free sodas, computers, etc), insurance, taxes, and salary, ~150k per employee is probably about right.
- JonFish85 13y ago
  That wouldn't shock me ($153k/yr). Say the average Zynga employee in NY & LA is making $90k, an employee overhead of 1.7x isn't doesn't seem outlandish (especially for a company that has grown very quickly and presumably hasn't had time or energy to streamline costs).
- jlarocco 13y ago
  Initially that seems a bit high, but after thinking about it a bit, it doesn't seem unreasonable. LA and NYC are expensive places to live, so the salaries will be bumped up to account for the cost of living. And the $80 million figure takes into account all of the taxes, social security, unemployment insurance, and benefit costs associated with the employees. An employee making $80k a year can easily cost $100k- $120k a year depending on benefits and taxes. And its trendy for big name "startup" companies to offer high salaries and costly fringe benefits to attract "rock star" programmers.
  - Cookingboy 13y ago
    80k is definitely too low, practically all big companies in the Bay offer more than that to fresh out of school kids these days.
- deleted 13y ago
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josh2600 13y ago
You know what the problem here is? There is no material difference between a 10 person game studio and a 3000 person game studio. Zynga likes to pretend that their Z-Cloud gives them an advantage over their competitors. Maybe it does in terms of operations, but games isn't an operations business, it's a hits business. All of the optimization in the world doesn't help if you can't keep making wins and Zynga can't make wins because they're too cluttered with layers of middle management FUD. 520 employees is a lot of people out of work, but I have to think they saw it coming. My advice to people in similar positions all throughout tech is this: there are three signs that indicate an impending downsizing. * Depressed Stock Value over long periods of time * An Acceleration of secrecy and fiefdom claiming within the culture * You look around and no one wants to come to work anymore If you find yourself in this situation, leave. Find another job. Being caught in a downsizing sucks, but if you pay attention you can avoid them. It's important to make friends and to be able to tell the temperature of your local environment to avoid such devastation. Edit: This can best be summarized as the well known phenomenon: "There's no such thing as a Free Lunch".
- Nitramp 13y ago
  The one sign for impending bankruptcy, sellout, or similar forms of doom: desperate last measures by top management to raise the stock price, presumably so they can make a last profit. E.g. SUNW changing its stock symbol to JAVA just before selling out to Oracle.
  - josh2600 13y ago
    That was so classy. I remember when that happened and then I remembered that RIMM just changed to BBRY... Research in Motion to Blackberry... HMMMMM. I'm just saying.
    - potatolicious 13y ago
      On the other hand, "Apple Computer" became "Apple" with apparently no adverse effects.
yoster 13y ago
I know how it feels to be in that situation. Best of luck to all the people who got the lay off. Make sure you hit the job search running and be sure to network as much as possible.
warcher 13y ago
The takeaway here, for me at least, is that Zynga got a lot of early success via a couple smart exploits-- early social network virality (since shut down by Facebook et al. because spammy Farmville requests hurt user experience) and freemium gaming (which has been embraced by the rest of the competition and no longer serves as a competitive advantage). So Zynga now has to be just another gaming company, and gaming, as an industry, is high-overhead and high-risk, with a lot of very serious competition. There's no hockey stick in running a big gaming conglomerate; it's just a media business. If you have a hit, you make money for a while, if you don't, you lose. Just like running a record label or a movie studio.
Irregardless 13y ago
> The move today will affect every part of the San Francisco social gaming company . . . Zynga is a gaming company? That's news to me -- I thought they were still in the business of tricking people into paying for the privilege to click things faster. Is it any surprise that wasn't enough to sustain a company?
mp99e99 13y ago
Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing]. Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
robodale 13y ago
http://www.nasdaq.com/symbol/znga/real-time http://www.nasdaq.com/symbol/znga/real-time
mp99e99 13y ago
Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing]. Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
unfletch 13y ago
The public announcement: http://blog.zynga.com/2013/06/03/ceo-update-4/ http://blog.zynga.com/2013/06/03/ceo-update-4/ "Our Founder and CEO Mark Pincus today sent a note to employees outlining structural changes..." It might seem like a small thing to some, but I can't believe the casual language on the blog post introduction. The CEO "sent a note" to his company? I'm sure that softened the blow to those 520 people. It was just a note, after all. I don't care what your culture is like or that you want to be a "cool" company. Notes are for reminding people to clear their old food from the fridge, or seeing if anyone wants to get together after work to welcome the new guy. This is serious shit to (hopefully) every one of your employees, and especially so to 18% of them. There are times to be formal. The letter itself is much better, but the blog intro is part of the official announcement. It counts.
- jlgreco 13y ago
  In this case, what is likely the material difference between that "note" and a "letter"? I can't imagine this note was scrawled with sharpie onto a notepad sized piece of paper with adhesive backing and faint images of fruits or snowmen printed on it.
  - unfletch 13y ago
    A note is by definition brief and informal. I think the employees deserve that any official communication in this kind of situation be neither. Edit: And I'm sure I've put more weight on that one phrase than almost anyone else, but I've worked at startups for years now and been through rounds of layoffs at a couple. It's appropriate to err in the other direction.
    - nissimk 13y ago
      You expect better from Zynga? Isn't this the same company that fired people immediately before the IPO so that founders could take back their stock options? "Being a meritocracy is one of their core values." http://abclocal.go.com/kgo/story?section=news/business&id=8426597 http://abclocal.go.com/kgo/story?section=news/business&i...
grappler 13y ago
So much for Tony Robbins and the “internet treasure”? http://www.youtube.com/watch?v=ZEojTYYyGA0 http://www.youtube.com/watch?v=ZEojTYYyGA0
dvt 13y ago
The gaming industry is so fucked. On one hand, you've got huge conglomerates like EA that release shitty game after shitty game with invasive DRM that would make Orwell cringe, and on the other you've got 2300+ people working on Farmville. I just feel bad for indie developers that release progressive and inventive games competition after competition with tiny teams of 1-2 and live on shoestring/student budgets. Steam Greenlight ended up being more of a failure than a success, next-gen consoles won't even give a shit about indies, and we wonder why this industry is so screwed up. Don't even get me started on the lack of proper infrastructure for competitive games, etc (at least in the West). The whole thing is just depressing.
- MartinCron 13y ago
  next-gen consoles won't even give a shit about indies Indies were given a disproportionate amount of attention at the PlayStation4 reveal.
- TillE 13y ago
  There's never been a better time to be an indie developer, particularly on the PC. Marketing remains difficult, but now there are virtually no barriers. Digital distribution and engines like Unity have changed everything. Steam has its problems, and I wish they'd just shift to an Apple-style app store model with a curated storefront. But in general, they've been a huge boon to independent developers.
  - mehrzad 13y ago
    >I wish they'd just shift to an Apple-style app store model If they lowered the minimum prices too, I wouldn't mind. But right now Steam has a lot of third-rate "side-project" games that are lower quality than free flash games online charging the price of a very good iOS/Android game and it's getting annoying. Now, I'm not one to think saturation with lower quality/more indie stuff is always bad (especially with music, for example) but it seems with the ubiquity of PC game development as a hobby, a decent amount of crap is a byproduct.
  - deleted 13y ago
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saurabhnanda 13y ago
I might be nitpicking here, but the very first sentence reeks of bullshit & PR spin. "...saying goodbye to 18% of our Zynga brothers & sisters..." Who says that in real life? "I'm sad, because yesterday 25% of my family had flu"
ignostic 13y ago
> "The reason? Mobile" I don't buy this at all, nor do I believe that this is a It seems like everyone blames everything on either the economy or a shift to mobile these days. Intel, Microsoft, EA, and now Zynga. All of this despite the fact that dekstop traffic has remained steady or grown, even in the last two years. Yes, more people are accessing the web via mobile, but it's still only 15%. [1] Do you see Activision-Blizzard and Steam talking about how mobile is stealing their lunch? Nah, they're too busy eating Zynga and EA's lunches. I have yet to see any data showing that EA or Zynga are shrinking based on forces beyond their control. I bet the guys on /r/gaming - annoying though they can be - could give you a better idea than journalists who buy the PR lines. This isn't some totally-unforeseen and cataclysmic surge to mobile. We're talking about a company with a reputation for churning out unoriginal copies of smaller/indie games. THAT is their problem. If Zynga wants to grown, they must focus on original and high-quality games. Costs and risks are much higher, but that's what people are willing to pay real money for. [1] http://searchengineland.com/report-mobile-traffic-to-local-sites-growing-faster-than-total-internet-now-at-27-percent-158139 http://searchengineland.com/report-mobile-traffic-to-local-s...
- stevenwei 13y ago
  It's really casual gaming that's suffering from this: folks are switching from playing those types of games on Facebook to playing them on their phones.
- ignostic 13y ago
  Sorry, I meant to add, "nor do I believe they haven't seen mobile games coming."
ajju 13y ago
To anyone at Zynga looking for an interesting meaningful challenge that also pays well: Transportation is changing, and InstantCab is on the forefront. We are hiring smart people to join our team of a excellent hackers who are also good people. We are hiring for almost every technical role you can think of. We have been growing at double digit % every month for several months. Helping people get from A to B seems like a simple problem that anyone can solve, but the real world complexity required to scale such a company demands pretty ingenious solutions and behind the curtain, we are building just such solutions. Email me: aj@instantcab.com so I can give you more details in a private conversation.
nicholassmith 13y ago
It's so weird, Zynga started auspiciously with a core team of some amazingly season develepors and rather than building up an amazing portfolio suddenly ended up doing...well, nothing good. The writing has been on the wall for a while, if we even see Zynga make it through this year I'd be surprised. You can't assume you're going to win by just thinking 'this will appeal to the masses', you need a hook to engage them. FarmVille worked because people enjoyed it, not the concept, you can't try and shovel the same shit twice. Plus, Draw Something was a dumb purchase. A great game with low revenues destroyed by high ads and shitty backed service. It was doomed to failure and a massive waste of money that they were too young to afford to risk.
venomsnake 13y ago
Why does Zynga have such a huge payroll? Blizzard have in thousands mostly because of the Game Masters they need to provide for WoW.
DividesByZero 13y ago
Bad news for the educational game accelerator they just launched.
VLM 13y ago
Here's the problem: Virtual Farmville Tractors at Zynga require about (520 this layoff)/(represents 0.18 of workforce) around 3000 people to produce. Real world tractors at Caterpillar Inc require about (125000 people worldwide)/(about 110 plants) = about 1000 people to produce. Something wrong when a fake tractor requires more people to produce than a real tractor (yes yes I know that Zynga makes more than Skinner box farm games on the FB platform, but I still found the comparison stunning)
- jaredsohn 13y ago
  The comparison falls even more short since Zynga develops all aspects of a farm, including animals and crops. And I woukd have to think there are many more virtual farms than real ones. You are also for some reason comparing all of Zynga with just one Caterpillar plant.
  - VLM 13y ago
    That is true that I compared to only one plant, however caterpillar is a holding company of multiple heavy equipment mfgrs, so it seemed unfair to compare the EMD locomotive factory AND the bulldozer factory vs merely farmville. On the other hand, there are many more types of caterpillar tractors than farmville tractors, which does even it up a bit.
Freestyler_3 13y ago
I do not know what these 2900 employees do, but not to long ago I played one of their games for a while. Some really big constant problems in their games. Once one thing breaks its takes a long time to get fixed, then it gets fixed but breaks another thing. I remember Thursday before thanksgiving weekend their game gave errors and was unplayable. It took 6 days for they to get it to work. That really shows devotion to the entertainment sector right? (Maybe it was a bad steak maybe I was the only one seeing these problems, who knows? Ask the company thats cutting 500 employees)
methehack 13y ago
> restructure its troubled business toward mobile How can you found a company in 2007, go public in 2011, and not be prepared for mobile in 2013? You take all that cash from public markets but fail to have a mobile strategy while hiring 3000 people? That's a colossal management failure. The board should rid the shareholders of him. Also, where the eff _was_ the board? You'd think someone would have just held up their iphone in a meeting and it would have been enough.
- potatolicious 13y ago
  Because no one is really prepared for mobile, even now. The problem isn't that no one saw the rise of mobile coming, but rather that no one really knows what to do about it in response. Most people still don't. This is particularly true for advertising-based companies. Mobile users are less engaged to your ads, have less intent, and are more loathe to tap on ads, so even if you can maintain the dominance of your product into the mobile space you're still looking at a bad revenue situation. Mobile is here now, in full force, but revenue on mobile platforms is still largely an unanswered question. We started out selling apps, then we started down microtransactions, and ads, but none of these are particularly great.
  - methehack 13y ago
    So I guess what you're saying is that zynga staffed as if mobile was going to be as profitable as online but it turned out that it was an entirely different beast. They scrambled to adjust, but nothing worked. Too many people; time for tough love. Fair enough. The overstaffing may still be excessive -- the reaction delayed, hard to tell -- but I can easily imagine swinging for a land grab and ending up surprised in the dirt. Thanks for explaining. I guess I'd make a crappy board member :)
  - mynameishere 13y ago
    I have accidentally clicked on mobile ads at least 100x more often than normal ads. This is actually really dangerous to the industry, because it artificially inflates revenue. When advertisers figure it out, the money will disappear.
martin_ 13y ago
I would love to see a breakdown on this. Specifically, the ratio between developers, marketers, management, etc.
camus 13y ago
no problem, they are pivoting.Why do people hate Zynga so much?
rdl 13y ago
I thought the whole deal with Zynga was that it was circling the drain (yet profitable) while waiting for "real money gaming" to be legal and possible. These cost cutting measures in their legacy business would seem to be a good thing in that light.
jokoon 13y ago
seriously, what did zunga do/make ?
cletus 13y ago
I feel bad for those who put their blood, sweat and tears into building Zynga. I feel bad for those who have just lost their jobs. I feel bad for those who remain under a cloud with the only comment they get is self-deflecting language from their CEO like "brothers and sisters". Who I don't feel bad for is Mark Pincus. The collapse of Zynga couldn't happen to a more deserving person. Just 18 months ago when Zynga was on top of the world, Pincus made a name for himself by bullying staff to give back stock options [1] for no other reason than he thought they didn't deserve such a huge windfall. Well those chickens have come home to roost. Those same employers will be the first to take flight having no further loyalty to the company. I also know that I wouldn't work for Pincus. He's shown his true character with this petty greed (how much difference did this make to him personally really?). Frankly I'd hesitate in working for any company backed by the same VCs that let this happen. To allow this erosion of what I'd call the "startup bargain" (trading salary for equity) by greatly reducing the upside is shortsighted and undermines the very conditions that makes the startup scene thrive and succeed. As much as I viewed Groupon as a scam (a Ponzi scheme essentially), Andrew Mason's parting words [2] after getting fired gained him a lot of respect (from me at least) as they were authentic and didn't seek to cast blame elsewhere. In fact he went so far as to make a joke of "spending more time with my family" (which we all know is a euphemism for getting fired). What entrepreneurs and VCs need to realize is these bullying tactics (and I include the underhanded clawback agreements to Skype employees in this) undermine the entire ecosystem and we need to send a powerful message that they can't and won't be tolerated. [1]: http://usatoday30.usatoday.com/tech/news/story/2011-11-10/zynga-ipo-stock/51158068/1 http://usatoday30.usatoday.com/tech/news/story/2011-11-10/zy... [2]: http://thenextweb.com/insider/2013/02/28/andrew-mason-groupoin/ http://thenextweb.com/insider/2013/02/28/andrew-mason-groupo...
- wslh 13y ago
  Frankly I'd hesitate in working for any company backed by the same VCs that let this happen. To allow this erosion of what I'd call the "startup bargain" (trading salary for equity) by greatly reducing the upside is shortsighted and undermines the very conditions that makes the startup scene thrive and succeed. Not exactly that, but Google invested on Zynga.
yesplorer 13y ago
3000 people were making those Zynga games? Doing what exactly? Pls I'm genuinely curious. These social games seems so lame to me that I can't think of any reason why someone will even think of building a public company on top of it. You simply cannot meet investors' quartely demand when your success is built on being "flavor of the month" business model. I don't have anything wrong against Zynga or its founder and so I don't wish them failure but this should have come as a common sense that they should have stayed private and stayed lean (both in taking VC funding and the number of employees)
hncommenter13 13y ago
Maybe I missed it, but I didn't see a WARN act filing by Zynga with the state of California for 2012 or 2013. http://www.edd.ca.gov/jobs_and_Training/Layoff_Services_WARN.htm http://www.edd.ca.gov/jobs_and_Training/Layoff_Services_WARN... My understanding is that WARN Act notices are required to be filed in CA for layoffs of more than 50 people by larger companies. (Perhaps the LA office has fewer than 50 people?) Ex-Zynga employee who feels like returning the favor? Make friends with a plaintiff's side employment lawyer. Here's one: http://www.girardgibbs.com/california-warn-act/ http://www.girardgibbs.com/california-warn-act/ (I'm guessing they make waiving the right to such suits a condition of the severance, though.) Note: I am not a lawyer and I have no idea whether Zynga violated the law. I have no affiliation with the firm linked above. I do not necessarily believe that filing a lawsuit will deliver either emotional or financial vindication, and I have no idea whether or how it might affect one's future employment prospects. But I do believe that all companies should be required to follow the law as written.
kmasters 13y ago
I look at this a little differently, Im not going to opine on the character of the CEO or his employees. Besides raw economic factors and the trend-happy game industry, I think its worth it to ask: What on earth are we building? And why are we building it? Its OK to build games we all need entertainment. Nothing wrong with that. But Zynga games were obsessive click factories which were as far as anyone can tell designed to be addictive. As an engineer, I have worked at places that had so called "projects" designed to "get more clicks". That may include a lot of web shops. Usually for ad revenue. But if you think about that from an engineering perspective, what a woeful, sad day it is to have your boss come to you with that mission. Its the day you realize that what you built has no real value to the user, and is a self serving mechanism to get meaningless clicks out of your robot users. In the old days we made software that people wanted to use and we didnt care how many times they clicked on a cow. Or on an ad.
sheri 13y ago
I had visited the Zynga office a few years back, and was super impressed. Free food/drinks everywhere, and the office looked really nice. They even had Zynga branded water. I had not played any Zynga games until then, but came back thinking these guys must be on to something. That evening I went back and signed up for Mafia wars. After a few minutes of repeatedly clicking buttons to watch an 'experience meter' rise, I knew this couldn't last. There is of course more to it than just that, but it just wasn't fun or engaging to play. I read a lot about how their analytics gives them an advantage, but I just didn't see the appeal of that game. That bubble had to burst.
dschiptsov 13y ago
Looks like an attempt to re-establishing connection with reality: Flash-games cannot be valued in billions even in a delirium.)
volume 13y ago
Anyone out there dare to claim there is any "light at the end of the tunnel"? Perhaps ZNGA is a good stock to buy now that it's over 10% off?

408 points by _pius 13y ago

I have only passively been paying attention to Zynga. I do feel bad for people who are now out of work. However, the staggering thing about this article to me was that 520 people only represents 18 percent of their employees. That means that after this, there's an astonishing 2300+ people still working on Farmville and friends. Coming from a nonprofit biomedical research group where I struggle to get single digit numbers of developers, that is mind-bending.

S4M 13y ago
Funny because I have in the past applied for jobs in such companies, but I never got an answer, and now I work for a company similar to Zynga.
Androsynth 13y ago
your nonprof biomedical group didnt have kleiner perkins pushing it towards an ipo ;)
- ttrreeww 13y ago
  Ah, but the IPO already happened so it's time to lay them off.
pvnick 13y ago
Hey JunkDNA, I was hoping to learn a little more about what you do and your field. I'm going to be graduating soon with a bachelors degree in biochemistry, and I would consider myself a fairly competent developer, so I'm looking to start doing some real scientific work soon beyond just vanilla software development. From your standpoint, what does the biomedical landscape look like and what kinds of things would developers be focused on? My email is pvnick@gmail.com if you'd like to talk. I look forward to hearing from you :)

bob13579 13y ago

Stock halted. Bracing for a crash. This will be bad.

bdcravens 13y ago
I'm seeing that trading will resume at 3:25 pm ET (in about 10 minutes from time I'm writing this). Grab your popcorn!
derwiki 13y ago
This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?
- deleted 13y ago
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- chollida1 13y ago
  Stocks get halted all the time. Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility. What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news. In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes. This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.
- jarcoal 13y ago
  It often happens after huge news, and it's meant to give investors time to digest it. I believe the last notable instance was after Jobs died, AAPL was halted.
  - chollida1 13y ago

seiji 13y ago

A good reminder to not get stuck in local fad maximums. Remember when the future of every single company was gamification or bust? Remember when the seemingly only viable business model was skinner boxing rube middle america housewives with no self control (oddly, middle eastern princes also would spend tens of thousands a month on those silly in app purchase games, except they can afford it and don't have their lives ruined with addict-induced credit card debt)? I don't have a point. Just notice how the "tech press" and fads and media sweeps through in its ever-shortening attention span to the point where they aren't good signals for anything anymore.

pekk 13y ago
Empty, derivative Facebook games are not any more "skinner box" than anything else we either enjoy or do out of necessity. Almost any game ever created could be described as a "skinner box." Completing work units for a salary could be described as a "skinner box." If there is something especially bad or manipulative about Facebook games, it isn't that they are a "skinner box."
- jbooth 13y ago
  Chess isn't a skinner box, neither is Solitaire or Skyrim. Even poker is less of a skinner box than the games we're talking about.
- boot 13y ago
  Hm. I'm not talking scientifically here or anything, but I've always felt the lack of any kind of depth in most Zynga games makes them feel very skinner box with little pretense beyond that. Most games have complicated stories or game play mechanics. Many Zynga games seem to be "Fill up these three bars by clicking these buttons. Watch them fill. It feels good doesn't it." Personally I couldn't say that about many other games/work.
- angersock 13y ago
  No, they very much are a skinner box. Read any good tutorial or paper in the field (say, http://www.fdg2013.org/program/papers/paper06_zagal_etal.pdf http://www.fdg2013.org/program/papers/paper06_zagal_etal.pdf ). The revenue model depends on base applied behaviorialism.

soup10 13y ago

With respect to employees that have lost their jobs. Good, fuck Zynga.

untog 13y ago

Boy does this suck for Zynga employees. I really feel for the former OMGPOP employees as well- looks like Zynga has taken them down with them. I know that OMGPOP were desperately short of cash themselves, but at least they were the masters of their own destinies. EDIT: and I wouldn't be too smug about their downfall if I were you. There could be repercussions across the tech sector if Zynga totally fails.

gfodor 13y ago
Why? I felt bad for Zynga employees who got screwed earlier since that was the first breach of trust by their CEO and it was still unclear if Zynga was something other than a game-copying exploiter of economically disadvantaged people through game mechanic trickery. But now, after all the dirty laundry has been aired? edit: Any repercussions for the tech sector if Zynga fails will fall in the "healthy correction" column in my book.
- pyoung 13y ago
  I would assume that he is referring to the possibility of a confidence crash in tech companies that would affect public markets. Personally, I don't think Zynga is widely held enough for it to have much of an impact, and as you mentioned, the dirty laundry has already been aired.
  - gfodor 13y ago
    Yeah, I think Zynga failing would have to be coupled with at least a few other non-social-gaming related companies for there to be any market-wide implications due to capital shifting. edit: honestly if you are worried about market-wide implications wrt ZNGA the stock, if they ousted Pincus and started fixing the company then the short squeeze and the subsequent margin calls would probably be more of concern than the stock cratering, which is what most people expect.
  - bennyg 13y ago
    I agree. If somehow Facebook plummeted and bankrupted it would absolutely raise doubts about the tech sector. 1/7 of the world can't use a service it trusts any more is a big deal.

programminggeek 13y ago

I feel really bad for the employees getting laid off, but this feels a lot like a company that assumed growth would be forever up and to the right without leveling off or declining. Maybe when you go from zero to hundreds of millions of dollars in revenue it's easy to feel that way, but I don't see a place where Zynga is going to ever grow very rapidly again like in the "good old days"

cwh 13y ago
as a former Zynga employee, i'm pretty sure the entire management team knows what they are doing, and have expected this for quite some time.
- deleted 13y ago
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- wilfra 13y ago
  What would you predict Zynga will look like in a year? In five years? Do you think these layoffs are a good or bad thing for the future of the company?
  - cwh 13y ago
    I truly hope this is a "cut once, cut deep" action. There are still a ton of extremely smart people at the company, I just hope they stop overreaching.
- deleted 13y ago
  [deleted]

x0x0 13y ago

Good thing Pincus sold off a bunch of stock [1] -- $190mm worth [2]. Even better, he sold it before the employee lockup expired [3]. Living like a boss == fuck you money in the bank, instead of locked up in a company like suckers (employees and investors). From the stock charts [4], it looks like it closed opening day at $9.50, Pincus and insiders dumped at $12, and if you're a regular employee w/ a 6mo lockup that presumably expired 16 Jun since the company opened 16 Dec 11, you've never seen a price higher than $6. ps -- dear employees and investors: your ceo dumping big blocks of stock is probably a negative signal [1] http://online.wsj.com/article/SB10001424052702304724404577299372042231462.html http://online.wsj.com/article/SB1000142405270230472440457729... [2] http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-keeps-crashing-but-mark-pincus-is-having-a-great-year/ http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-kee... [3] http://www.huffingtonpost.com/2012/07/31/zynga-insider-trading-lawsuit_n_1724410.html http://www.huffingtonpost.com/2012/07/31/zynga-insider-tradi... [4] http://www.google.com/finance?cid=481720736332929 http://www.google.com/finance?cid=481720736332929 updated to include pricing. Again, selling at 2x your employees == living like a fucking boss.

perryh2 13y ago
Woah -- I did not know this happened. Thanks for taking the time to provide sources.
antonius 13y ago
Completely agree with you on this. A CEO dumping a large amount of stock is usually (but not always) a sign of bad things to come and sends a negative signal to the market.
- snorkel 13y ago
  ... but exec share dumping is not unusual and happens like clockwork at most companies despite market conditions. Typically execs sell off their shares on a preset schedule, they sell as much as they can as soon as they can because of the bird in hand and all that. The truly evil execs are those that sell-sell-sell as much as they can while telling their employees to hang onto their shares and wait.

gaius 13y ago

Whatever happens - Pincus will do alright for himself.

gyardley 13y ago
He's already done alright for himself, because he was wise enough to take money off the table when he had the opportunity to do so. What I don't understand is why he's still at it. This must be an enormously stressful time. Why wouldn't he take the rather impressive amount of money he's already made and just go enjoy his life? Evidence, I suppose, that some of us are just wired differently.
- zenith2037 13y ago
  Some captains refuse to leave their sinking ship.
  - Helpful_Bunny 13y ago
    Zynga might have some fairly tight contractual obligations to Facebook as part of being a preferred content maker on their platform. Worth investigating, if you're interested in this business.
- gaius 13y ago
  For certain values of "wise" and "opportunity", sure: https://news.ycombinator.com/item?id=5815128 https://news.ycombinator.com/item?id=5815128
- roc 13y ago
  > "This must be an enormously stressful time." If he's already taken (a lot of) money off the table, what's there (for him) to be stressed about?
  - gyardley 13y ago
    You might be different, but I've always found firing employees and/or not meeting expectations pretty stressful, no matter what my personal financial situation.

bosch 13y ago

It's unfortunate such an ethical CEO as Mark Pincus has to go through troubles such as this. This is also a reminder that only very few companies caught up in the bubble have real business models that will last when the bubble pops.

smallegan 13y ago
If you read the comment above: https://news.ycombinator.com/item?id=5815128 https://news.ycombinator.com/item?id=5815128 You have to wonder how ethical he really is?
- Cookingboy 13y ago
  I'm sure he was being sarcastic
  - smallegan 13y ago
    You are probably right but for some reason I guess I missed the sarcasm. I haven't followed Mark Pincus so I wasn't sure and this isn't reddit so I guess I'm just used to people being more sincere.
    - bosch 13y ago
      Normally, I would definitely be serious and more technical. However, the fact that Pincus is one of the biggest scammers out there and people still: 1) Believe him 2) Invest in his companies 3) Work for him, leads me to be a little sarcastic. It's hard in this day and age with information overload to see people still getting involved in pyramid schemes and wanting to buy snake oil.
james33 13y ago
This is sarcasm...right?
bosch 13y ago
Yes, I was being sarcastic. Sorry, I thought everyone knew what a douche Pincus was: (and this is just ONE example): http://techcrunch.com/2009/10/31/scamville-the-social-gaming-ecosystem-of-hell/ http://techcrunch.com/2009/10/31/scamville-the-social-gaming... Sidenote: Does HN stop editing after a certain timeframe? I can't find a link to edit my original comment to add this.

ahi 13y ago

Stock trading halted after this was published? Did this article beat a planned press release to the punch? If you traded this news you might have had a good day.

ry0ohki 13y ago

Based on the article, assuming the $80 mil in savings was over 1 year, that means the average Zynga employee costs $153k per year.

sdoowpilihp 13y ago
By the time you add in overhead costs (rent, those free sodas, computers, etc), insurance, taxes, and salary, ~150k per employee is probably about right.
JonFish85 13y ago
That wouldn't shock me ($153k/yr). Say the average Zynga employee in NY & LA is making $90k, an employee overhead of 1.7x isn't doesn't seem outlandish (especially for a company that has grown very quickly and presumably hasn't had time or energy to streamline costs).
jlarocco 13y ago
Initially that seems a bit high, but after thinking about it a bit, it doesn't seem unreasonable. LA and NYC are expensive places to live, so the salaries will be bumped up to account for the cost of living. And the $80 million figure takes into account all of the taxes, social security, unemployment insurance, and benefit costs associated with the employees. An employee making $80k a year can easily cost $100k- $120k a year depending on benefits and taxes. And its trendy for big name "startup" companies to offer high salaries and costly fringe benefits to attract "rock star" programmers.
- Cookingboy 13y ago
  80k is definitely too low, practically all big companies in the Bay offer more than that to fresh out of school kids these days.
deleted 13y ago
[deleted]

josh2600 13y ago

You know what the problem here is? There is no material difference between a 10 person game studio and a 3000 person game studio. Zynga likes to pretend that their Z-Cloud gives them an advantage over their competitors. Maybe it does in terms of operations, but games isn't an operations business, it's a hits business. All of the optimization in the world doesn't help if you can't keep making wins and Zynga can't make wins because they're too cluttered with layers of middle management FUD. 520 employees is a lot of people out of work, but I have to think they saw it coming. My advice to people in similar positions all throughout tech is this: there are three signs that indicate an impending downsizing. * Depressed Stock Value over long periods of time * An Acceleration of secrecy and fiefdom claiming within the culture * You look around and no one wants to come to work anymore If you find yourself in this situation, leave. Find another job. Being caught in a downsizing sucks, but if you pay attention you can avoid them. It's important to make friends and to be able to tell the temperature of your local environment to avoid such devastation. Edit: This can best be summarized as the well known phenomenon: "There's no such thing as a Free Lunch".

Nitramp 13y ago
The one sign for impending bankruptcy, sellout, or similar forms of doom: desperate last measures by top management to raise the stock price, presumably so they can make a last profit. E.g. SUNW changing its stock symbol to JAVA just before selling out to Oracle.
- josh2600 13y ago
  That was so classy. I remember when that happened and then I remembered that RIMM just changed to BBRY... Research in Motion to Blackberry... HMMMMM. I'm just saying.
  - potatolicious 13y ago
    On the other hand, "Apple Computer" became "Apple" with apparently no adverse effects.

yoster 13y ago

I know how it feels to be in that situation. Best of luck to all the people who got the lay off. Make sure you hit the job search running and be sure to network as much as possible.

warcher 13y ago

The takeaway here, for me at least, is that Zynga got a lot of early success via a couple smart exploits-- early social network virality (since shut down by Facebook et al. because spammy Farmville requests hurt user experience) and freemium gaming (which has been embraced by the rest of the competition and no longer serves as a competitive advantage). So Zynga now has to be just another gaming company, and gaming, as an industry, is high-overhead and high-risk, with a lot of very serious competition. There's no hockey stick in running a big gaming conglomerate; it's just a media business. If you have a hit, you make money for a while, if you don't, you lose. Just like running a record label or a movie studio.

Irregardless 13y ago

> The move today will affect every part of the San Francisco social gaming company . . . Zynga is a gaming company? That's news to me -- I thought they were still in the business of tricking people into paying for the privilege to click things faster. Is it any surprise that wasn't enough to sustain a company?

mp99e99 13y ago

Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing]. Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!

robodale 13y ago

http://www.nasdaq.com/symbol/znga/real-time http://www.nasdaq.com/symbol/znga/real-time

mp99e99 13y ago

unfletch 13y ago

The public announcement: http://blog.zynga.com/2013/06/03/ceo-update-4/ http://blog.zynga.com/2013/06/03/ceo-update-4/ "Our Founder and CEO Mark Pincus today sent a note to employees outlining structural changes..." It might seem like a small thing to some, but I can't believe the casual language on the blog post introduction. The CEO "sent a note" to his company? I'm sure that softened the blow to those 520 people. It was just a note, after all. I don't care what your culture is like or that you want to be a "cool" company. Notes are for reminding people to clear their old food from the fridge, or seeing if anyone wants to get together after work to welcome the new guy. This is serious shit to (hopefully) every one of your employees, and especially so to 18% of them. There are times to be formal. The letter itself is much better, but the blog intro is part of the official announcement. It counts.

jlgreco 13y ago
In this case, what is likely the material difference between that "note" and a "letter"? I can't imagine this note was scrawled with sharpie onto a notepad sized piece of paper with adhesive backing and faint images of fruits or snowmen printed on it.
- unfletch 13y ago
  A note is by definition brief and informal. I think the employees deserve that any official communication in this kind of situation be neither. Edit: And I'm sure I've put more weight on that one phrase than almost anyone else, but I've worked at startups for years now and been through rounds of layoffs at a couple. It's appropriate to err in the other direction.
  - nissimk 13y ago
    You expect better from Zynga? Isn't this the same company that fired people immediately before the IPO so that founders could take back their stock options? "Being a meritocracy is one of their core values." http://abclocal.go.com/kgo/story?section=news/business&id=8426597 http://abclocal.go.com/kgo/story?section=news/business&i...

grappler 13y ago

So much for Tony Robbins and the “internet treasure”? http://www.youtube.com/watch?v=ZEojTYYyGA0 http://www.youtube.com/watch?v=ZEojTYYyGA0

dvt 13y ago

The gaming industry is so fucked. On one hand, you've got huge conglomerates like EA that release shitty game after shitty game with invasive DRM that would make Orwell cringe, and on the other you've got 2300+ people working on Farmville. I just feel bad for indie developers that release progressive and inventive games competition after competition with tiny teams of 1-2 and live on shoestring/student budgets. Steam Greenlight ended up being more of a failure than a success, next-gen consoles won't even give a shit about indies, and we wonder why this industry is so screwed up. Don't even get me started on the lack of proper infrastructure for competitive games, etc (at least in the West). The whole thing is just depressing.

MartinCron 13y ago
next-gen consoles won't even give a shit about indies Indies were given a disproportionate amount of attention at the PlayStation4 reveal.
TillE 13y ago
There's never been a better time to be an indie developer, particularly on the PC. Marketing remains difficult, but now there are virtually no barriers. Digital distribution and engines like Unity have changed everything. Steam has its problems, and I wish they'd just shift to an Apple-style app store model with a curated storefront. But in general, they've been a huge boon to independent developers.
- mehrzad 13y ago
  >I wish they'd just shift to an Apple-style app store model If they lowered the minimum prices too, I wouldn't mind. But right now Steam has a lot of third-rate "side-project" games that are lower quality than free flash games online charging the price of a very good iOS/Android game and it's getting annoying. Now, I'm not one to think saturation with lower quality/more indie stuff is always bad (especially with music, for example) but it seems with the ubiquity of PC game development as a hobby, a decent amount of crap is a byproduct.
- deleted 13y ago
  [deleted]

saurabhnanda 13y ago

I might be nitpicking here, but the very first sentence reeks of bullshit & PR spin. "...saying goodbye to 18% of our Zynga brothers & sisters..." Who says that in real life? "I'm sad, because yesterday 25% of my family had flu"

ignostic 13y ago

> "The reason? Mobile" I don't buy this at all, nor do I believe that this is a It seems like everyone blames everything on either the economy or a shift to mobile these days. Intel, Microsoft, EA, and now Zynga. All of this despite the fact that dekstop traffic has remained steady or grown, even in the last two years. Yes, more people are accessing the web via mobile, but it's still only 15%. [1] Do you see Activision-Blizzard and Steam talking about how mobile is stealing their lunch? Nah, they're too busy eating Zynga and EA's lunches. I have yet to see any data showing that EA or Zynga are shrinking based on forces beyond their control. I bet the guys on /r/gaming - annoying though they can be - could give you a better idea than journalists who buy the PR lines. This isn't some totally-unforeseen and cataclysmic surge to mobile. We're talking about a company with a reputation for churning out unoriginal copies of smaller/indie games. THAT is their problem. If Zynga wants to grown, they must focus on original and high-quality games. Costs and risks are much higher, but that's what people are willing to pay real money for. [1] http://searchengineland.com/report-mobile-traffic-to-local-sites-growing-faster-than-total-internet-now-at-27-percent-158139 http://searchengineland.com/report-mobile-traffic-to-local-s...

stevenwei 13y ago
It's really casual gaming that's suffering from this: folks are switching from playing those types of games on Facebook to playing them on their phones.
ignostic 13y ago
Sorry, I meant to add, "nor do I believe they haven't seen mobile games coming."

ajju 13y ago

To anyone at Zynga looking for an interesting meaningful challenge that also pays well: Transportation is changing, and InstantCab is on the forefront. We are hiring smart people to join our team of a excellent hackers who are also good people. We are hiring for almost every technical role you can think of. We have been growing at double digit % every month for several months. Helping people get from A to B seems like a simple problem that anyone can solve, but the real world complexity required to scale such a company demands pretty ingenious solutions and behind the curtain, we are building just such solutions. Email me: aj@instantcab.com so I can give you more details in a private conversation.

nicholassmith 13y ago

It's so weird, Zynga started auspiciously with a core team of some amazingly season develepors and rather than building up an amazing portfolio suddenly ended up doing...well, nothing good. The writing has been on the wall for a while, if we even see Zynga make it through this year I'd be surprised. You can't assume you're going to win by just thinking 'this will appeal to the masses', you need a hook to engage them. FarmVille worked because people enjoyed it, not the concept, you can't try and shovel the same shit twice. Plus, Draw Something was a dumb purchase. A great game with low revenues destroyed by high ads and shitty backed service. It was doomed to failure and a massive waste of money that they were too young to afford to risk.

venomsnake 13y ago

Why does Zynga have such a huge payroll? Blizzard have in thousands mostly because of the Game Masters they need to provide for WoW.

DividesByZero 13y ago

Bad news for the educational game accelerator they just launched.

VLM 13y ago

Here's the problem: Virtual Farmville Tractors at Zynga require about (520 this layoff)/(represents 0.18 of workforce) around 3000 people to produce. Real world tractors at Caterpillar Inc require about (125000 people worldwide)/(about 110 plants) = about 1000 people to produce. Something wrong when a fake tractor requires more people to produce than a real tractor (yes yes I know that Zynga makes more than Skinner box farm games on the FB platform, but I still found the comparison stunning)

jaredsohn 13y ago
The comparison falls even more short since Zynga develops all aspects of a farm, including animals and crops. And I woukd have to think there are many more virtual farms than real ones. You are also for some reason comparing all of Zynga with just one Caterpillar plant.
- VLM 13y ago
  That is true that I compared to only one plant, however caterpillar is a holding company of multiple heavy equipment mfgrs, so it seemed unfair to compare the EMD locomotive factory AND the bulldozer factory vs merely farmville. On the other hand, there are many more types of caterpillar tractors than farmville tractors, which does even it up a bit.

Freestyler_3 13y ago

I do not know what these 2900 employees do, but not to long ago I played one of their games for a while. Some really big constant problems in their games. Once one thing breaks its takes a long time to get fixed, then it gets fixed but breaks another thing. I remember Thursday before thanksgiving weekend their game gave errors and was unplayable. It took 6 days for they to get it to work. That really shows devotion to the entertainment sector right? (Maybe it was a bad steak maybe I was the only one seeing these problems, who knows? Ask the company thats cutting 500 employees)

methehack 13y ago

> restructure its troubled business toward mobile How can you found a company in 2007, go public in 2011, and not be prepared for mobile in 2013? You take all that cash from public markets but fail to have a mobile strategy while hiring 3000 people? That's a colossal management failure. The board should rid the shareholders of him. Also, where the eff _was_ the board? You'd think someone would have just held up their iphone in a meeting and it would have been enough.

potatolicious 13y ago
Because no one is really prepared for mobile, even now. The problem isn't that no one saw the rise of mobile coming, but rather that no one really knows what to do about it in response. Most people still don't. This is particularly true for advertising-based companies. Mobile users are less engaged to your ads, have less intent, and are more loathe to tap on ads, so even if you can maintain the dominance of your product into the mobile space you're still looking at a bad revenue situation. Mobile is here now, in full force, but revenue on mobile platforms is still largely an unanswered question. We started out selling apps, then we started down microtransactions, and ads, but none of these are particularly great.
- methehack 13y ago
  So I guess what you're saying is that zynga staffed as if mobile was going to be as profitable as online but it turned out that it was an entirely different beast. They scrambled to adjust, but nothing worked. Too many people; time for tough love. Fair enough. The overstaffing may still be excessive -- the reaction delayed, hard to tell -- but I can easily imagine swinging for a land grab and ending up surprised in the dirt. Thanks for explaining. I guess I'd make a crappy board member :)
- mynameishere 13y ago
  I have accidentally clicked on mobile ads at least 100x more often than normal ads. This is actually really dangerous to the industry, because it artificially inflates revenue. When advertisers figure it out, the money will disappear.

martin_ 13y ago

I would love to see a breakdown on this. Specifically, the ratio between developers, marketers, management, etc.

camus 13y ago

no problem, they are pivoting.Why do people hate Zynga so much?

rdl 13y ago

I thought the whole deal with Zynga was that it was circling the drain (yet profitable) while waiting for "real money gaming" to be legal and possible. These cost cutting measures in their legacy business would seem to be a good thing in that light.

jokoon 13y ago

seriously, what did zunga do/make ?

cletus 13y ago

I feel bad for those who put their blood, sweat and tears into building Zynga. I feel bad for those who have just lost their jobs. I feel bad for those who remain under a cloud with the only comment they get is self-deflecting language from their CEO like "brothers and sisters". Who I don't feel bad for is Mark Pincus. The collapse of Zynga couldn't happen to a more deserving person. Just 18 months ago when Zynga was on top of the world, Pincus made a name for himself by bullying staff to give back stock options [1] for no other reason than he thought they didn't deserve such a huge windfall. Well those chickens have come home to roost. Those same employers will be the first to take flight having no further loyalty to the company. I also know that I wouldn't work for Pincus. He's shown his true character with this petty greed (how much difference did this make to him personally really?). Frankly I'd hesitate in working for any company backed by the same VCs that let this happen. To allow this erosion of what I'd call the "startup bargain" (trading salary for equity) by greatly reducing the upside is shortsighted and undermines the very conditions that makes the startup scene thrive and succeed. As much as I viewed Groupon as a scam (a Ponzi scheme essentially), Andrew Mason's parting words [2] after getting fired gained him a lot of respect (from me at least) as they were authentic and didn't seek to cast blame elsewhere. In fact he went so far as to make a joke of "spending more time with my family" (which we all know is a euphemism for getting fired). What entrepreneurs and VCs need to realize is these bullying tactics (and I include the underhanded clawback agreements to Skype employees in this) undermine the entire ecosystem and we need to send a powerful message that they can't and won't be tolerated. [1]: http://usatoday30.usatoday.com/tech/news/story/2011-11-10/zynga-ipo-stock/51158068/1 http://usatoday30.usatoday.com/tech/news/story/2011-11-10/zy... [2]: http://thenextweb.com/insider/2013/02/28/andrew-mason-groupoin/ http://thenextweb.com/insider/2013/02/28/andrew-mason-groupo...

wslh 13y ago
Frankly I'd hesitate in working for any company backed by the same VCs that let this happen. To allow this erosion of what I'd call the "startup bargain" (trading salary for equity) by greatly reducing the upside is shortsighted and undermines the very conditions that makes the startup scene thrive and succeed. Not exactly that, but Google invested on Zynga.

yesplorer 13y ago

3000 people were making those Zynga games? Doing what exactly? Pls I'm genuinely curious. These social games seems so lame to me that I can't think of any reason why someone will even think of building a public company on top of it. You simply cannot meet investors' quartely demand when your success is built on being "flavor of the month" business model. I don't have anything wrong against Zynga or its founder and so I don't wish them failure but this should have come as a common sense that they should have stayed private and stayed lean (both in taking VC funding and the number of employees)

hncommenter13 13y ago

Maybe I missed it, but I didn't see a WARN act filing by Zynga with the state of California for 2012 or 2013. http://www.edd.ca.gov/jobs_and_Training/Layoff_Services_WARN.htm http://www.edd.ca.gov/jobs_and_Training/Layoff_Services_WARN... My understanding is that WARN Act notices are required to be filed in CA for layoffs of more than 50 people by larger companies. (Perhaps the LA office has fewer than 50 people?) Ex-Zynga employee who feels like returning the favor? Make friends with a plaintiff's side employment lawyer. Here's one: http://www.girardgibbs.com/california-warn-act/ http://www.girardgibbs.com/california-warn-act/ (I'm guessing they make waiving the right to such suits a condition of the severance, though.) Note: I am not a lawyer and I have no idea whether Zynga violated the law. I have no affiliation with the firm linked above. I do not necessarily believe that filing a lawsuit will deliver either emotional or financial vindication, and I have no idea whether or how it might affect one's future employment prospects. But I do believe that all companies should be required to follow the law as written.

kmasters 13y ago

I look at this a little differently, Im not going to opine on the character of the CEO or his employees. Besides raw economic factors and the trend-happy game industry, I think its worth it to ask: What on earth are we building? And why are we building it? Its OK to build games we all need entertainment. Nothing wrong with that. But Zynga games were obsessive click factories which were as far as anyone can tell designed to be addictive. As an engineer, I have worked at places that had so called "projects" designed to "get more clicks". That may include a lot of web shops. Usually for ad revenue. But if you think about that from an engineering perspective, what a woeful, sad day it is to have your boss come to you with that mission. Its the day you realize that what you built has no real value to the user, and is a self serving mechanism to get meaningless clicks out of your robot users. In the old days we made software that people wanted to use and we didnt care how many times they clicked on a cow. Or on an ad.

sheri 13y ago

I had visited the Zynga office a few years back, and was super impressed. Free food/drinks everywhere, and the office looked really nice. They even had Zynga branded water. I had not played any Zynga games until then, but came back thinking these guys must be on to something. That evening I went back and signed up for Mafia wars. After a few minutes of repeatedly clicking buttons to watch an 'experience meter' rise, I knew this couldn't last. There is of course more to it than just that, but it just wasn't fun or engaging to play. I read a lot about how their analytics gives them an advantage, but I just didn't see the appeal of that game. That bubble had to burst.

dschiptsov 13y ago

Looks like an attempt to re-establishing connection with reality: Flash-games cannot be valued in billions even in a delirium.)

volume 13y ago

Anyone out there dare to claim there is any "light at the end of the tunnel"? Perhaps ZNGA is a good stock to buy now that it's over 10% off?