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Zynga Lays Off 15% of Its Workforce
- gboudrias 13y agoOnly 15%? They're doing better than I expected!
- fennecfoxen 13y ago15% down, 85% to go.
- h2s 13y agoEagerly looking forward to the explanation for this weird juxtaposition. http://i.imgur.com/huUv09m.png http://i.imgur.com/huUv09m.png
- notwedtm 13y agoThis is the first thing I saw today upon opening HN. Seriously, how does this make sense?
- sharkweek 13y agoBecause it's massively beneficial from a PR perspective to lay people off the same day you're doing something "positive." Specifically here, it has certainly diverted a lot of attention that would otherwise be on a negative like laying people off into something that looks far more positive for the company. Last time Zynga laid off a large % of their workforce, wasn't it during a huge conference or the same day Apple had made an announcement about new products or something? That's another great way to minimize attention toward something like this.
- mullingitover 13y agoI don't see how this comes out as a positive for Zynga. They're basically saying, hey, we weren't able to leverage our existing staff's talent, maybe if we bring in new talent our pattern of failure to efficiently manage our intellectual capital will somehow fix itself. If I worked at NaturalMotion I'd be polishing my resume right now.
- MartinCron 13y agoIf I worked at NaturalMotion I'd be polishing my resume right now That would be good advice even without the same-day layoffs.
- deleted 13y ago[deleted]
- WilliamCClegg 13y agoclockworkelf, a friendly heads up, you've been shadowbanned. It makes me sad to see people taking the time to post comments and not realizing they all instantly vanish.
- Ygg2 13y agoBasically all of their previous staff was hired by chimps, so they had to fire them. Fire staff that is, not the chimps. The chimps ordered a new batch. Perfect moon logic.
- clockworkelf 13y agoI think what has happened is that, in this technocratic age, corporations act like living entities. It's like a complex organism that acquires and drops resources in order to serve it's own survival and consumption goals. As corporations increasingly become deeper and deeper wells of energy(i.e. money, human resources) this juxtaposition will become more and more glaring. This is a result of the marriage of corporation and state.
- ChuckMcM 13y agoIts not that weird. They had 200M in revenue last quarter[1] with about 2000 employees. That is about $100K/employee, since employees probably cost more than that at the median, its not really a sustainable strategy. Swap out employees who are making more $/employee to boost the average and maybe you have a going concern. [1] http://investor.zynga.com/releasedetail.cfm?ReleaseID=800274 http://investor.zynga.com/releasedetail.cfm?ReleaseID=800274
- ankitml 13y agoyour estimation for employee cost is too much. 100k/quarter is more than double on what you will need to hire an employee/rent/coffee/massage/heathcare all package included.
- qdog 13y agoIf the average person there makes 100k per QUARTER I can see how they'd be losing a lot of money. Either you mixed quarters and years, or I'm in the wrong type of business.
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- meritt 13y agoThat's $100k revenue per employee in Q3 but employee expense is much lower than that[1]. Probably a median annual salary+bonuses of $100k + 15% in taxes & benefits, we're still looking at maybe $30k/employee/quarter. [1] http://www.glassdoor.com/Salary/Zynga-Salaries-E243552.htm http://www.glassdoor.com/Salary/Zynga-Salaries-E243552.htm
- aortega 13y agoWait....only 15% in taxes & benefits? where is Zynga located, Cayman islands?
- _random_ 13y agoIt's a new radical management concept: you start replacing pieces of your failing company with other smaller but more successful companies. Start at the bottom, finish at the top. In two years after a series of lay-offs and acqui-hires the whole staff will be replaced finishing with CEO with a proper replacement hired from Rovio's board.
- panabee 13y agotrimming fat while investing in innovation is not mutually exclusive, esp if you have a sizable cash cushion and a new CEO like zynga. on the surface, it seems unfair to compare this acquisition with omgpop since naturalmotion offers defensible IP and technology that can be used in helping zynga's games appear more lifelike, or like lucas technologies, help others make their creations, whether games or movies, appear more lifelike. more realistic animations and game play will become more common as mobile phones become more powerful, much as we saw with gaming consoles. this is a bold investment in the future of mobile (and potentially smart TV) entertainment.
- Ygg2 13y agoInnovation? Zynga? What exactly did they innovate, other than employee performance tracking software?
- panabee 13y agothis acquisition is zynga investing in innovation.
- Ygg2 13y agoI see. Corp speak - By aggressively optimizing our resource acquisition, we invest in solution innovation inflammation conflagration immolation.
- bronbron 13y agoIt's not at all corp speak... are you serious? It's the same idea behind Facebook trying to buy Snapchat. Facebook realizes another team is much more innovative & successful than them in attracting young users, so they try and spend money to acquire that talent and invest in that team's innovative ability (pay $3B now to realize >$3B revenue in the future).
- product50 13y ago
- munificent 13y agoLooks like Mattrick brought his well-tread "why retrain when you can swap out people" practices with him from EA. > On November 9, 2009, EA announced its acquisition of social casual games developer Playfish for US$275 million. On the same day, the company announced layoffs of 1500 employees, representing 17% of its workforce, across a number of studios including EA Tiburon, Visceral Games, Mythic and EA Black Box. I was at Tiburon when that happened. Not a fun day. :(
- acjohnson55 13y agoTiburon made one of my favorite games: Madden 64!
- prostoalex 13y agoFrom what I've read, Zynga is not run as a monolithic company, but as a confederation of studios that do not necessarily share programming, design and product management talent, but share HR, legal, and administrative. Thus when some project reaches end of life, it's time for the entire studio to go.
- jlees 13y agoMany game companies work like this.
- Zigurd 13y agoSchadenzyngafreude: The good, but somewhat guilty feeling of pleasure in being right about an overhyped venture in what everyone knows is a rotten market segment.
- jrs99 13y agoonly people that hyped zynga were investors that had never played a single video game in their lifetime. everyone else was like "This is a bad investment" two seconds after hearing about it.
- _random_ 13y agoBuy -> inflate hype -> sell. It was a good investment.
- MartinCron 13y agoSee also: Vinzyndication, the good, but somewhat unsettling feeling of being the only person in an organization who didn't want to try to emulate the Zynga model.
- james33 13y agoSo, it appears they laid off 15% of their workforce to make room for NaturalMotion's workforce.
- bhartzer 13y agoCould it be that some of the people who are a part of NaturalMotion are redundant, so they chose to keep the NaturalMotion employees rather than the Zynga employees? I'm not defending them or laying off employees, but there could be more to it than what we are actually seeing here.
- philgr 13y agoWoah. I'm surprised they still have a workforce.
- lowglow 13y agoSerious: Why are people still working for this company?
- tomasien 13y agoI have a family member there, it's because he's highly unlikely to be fired (even as they fire lots of folks) and he's looking for the right position elsewhere.
- lowglow 13y ago> he's highly unlikely to be fired Yet. Also, out of respect for the entire sustainability of the sector, why perpetuate a company that treats engineers like disposable commodities?
- Macsenour 13y agoThey generally go hand-in-hand... those execs who treat game engineers poorly, think they can replace those same engineers in a day or so. After 30 years of seeing this over and over, I left the game industry.
- lowglow 13y agoAt the first sign of this I tend to leave a company. I just can't, in good faith, participate in treating people like this. I managed to learn a few things (no particular order): 1. work for an engineer ceo 2. work on a product that requires engineers (not just sales) 3. work for yourself maybe I'll add these to http://truth.techendo.co/ http://truth.techendo.co/
- tomasien 13y agoHe would be incredibly hard to replace for various reasons. But they're gonna have to when he leaves I guess....
- torhorway 13y agoBecause they pay above the market average and the benefits are good. (145k for 1 year out of college + 4 weeks vacation a year)
- magoon 13y agoNo matter how you rationalize this, it's still a loss of 1500 jobs - their replacements financed by the very profit those employees helped generate.
- EpicEng 13y ago1500? They are (were) a ~2,000 employee company and the laid off 15%.
- yetanotherphd 13y agoFiring people is a natural part of doing business. Decision should be judged (morally) on the margin. If I fire 100 people, I haven't resulted in 100 people never being able to work again, I have simply shifted them to their next-best option.
- fletchowns 13y agoI wouldn't pretend like you are doing them any favors though. You don't know what is going on in all of their lives, it could be a very unfortunate time for them to be fired, leading to real hardship. That's not to say that terminations aren't a necessary part of doing business. The leaders just need to be very careful about managing the growth of a company in a responsible way.
- netrus 13y agoAs I am young, I often get the chance to start at a company that just laid off many old employees (because most companies know they cannot stop hiring at all, because I am cheaper, and because I'm educated in recent technology). But do I want that? I'll be one of those old employees one day. So I will go to the company that treats its aging staff (or people from unsuccessful business lines, etc.) right. Don't forget that effect when you choose hire&fire over educating your internal staff.
- yetanotherphd 13y agobeing "cheaper" is not in itself an advantage. You personally might benefit from having a lower cost of living, for whatever reason, but your employer never sees this. All they see is the value you provide when you are at work. If two people offer the same value, they will offer the same wage, regardless of the cost of living of those individuals. Now the person with the higher cost of living might find this wage too low, and be forced to take a job with more hours/stress in order to achieve the income they require, or to adjust their lifestyle. But none of these things change what a company is willing to pay. The rest of your post is premised in the idea that firing someone is inherently immoral. It is not something that should be taken lightly, since there are big adjustment costs for both sides, but as I said before, it only moves a person to their next-best option. The action of firing someone shouldn't be viewed as depriving them of a job for life* (which is made up for by a virtuous company providing them with a job for life). The same argument applies to many other cases. A school teacher cannot say "if it weren't for me, these children would have had no education, see how valuable I am" because if it weren't for that teacher, someone else would have done the job. *Here life = the average time a person spends at a company and the argument remains the same.
- ergoproxy 13y agoDid Zynga lay off 15% of its workforce to recoup the $527M investment it made in NaturalMotion? See https://news.ycombinator.com/item?id=7153395 https://news.ycombinator.com/item?id=7153395 This article says they'll take a $17M charge this year on the lay off and then save about $33M/year. Discounted at 6% per annum that works out to $533M. See http://www.wolframalpha.com/input/?i=-17+%2B+Sum%5B33%2F1.06%5En%2C%7Bn%2C1%2Cinf%7D%5D http://www.wolframalpha.com/input/?i=-17+%2B+Sum%5B33%2F1.06... The other article says Zynga has "about $1.2 billion in cash and marketable securities on hand." But a dailyfinance article suggests companies aren't really as cash rich as they seem; their money is locked up in offshore tax havens; they can't repatriate it without paying tax on it: http://www.dailyfinance.com/2011/07/25/why-are-rich-companies-laying-off-poor-workers/ http://www.dailyfinance.com/2011/07/25/why-are-rich-companie...
- sethhochberg 13y agoQuestion for those with a little more tax acumen than I have - if moving large sums of money offshore is frequently a one-way street due to tax penalties when that cash comes back into the country, what are companies using (or able to use) that cash for?
- jmcphers 13y agoBuying stuff that's also offshore. For instance, it's rumored that Microsoft's acquisition of Skype was much less expensive than it might have been because Microsoft was able to purchase Skype with funds already overseas--if they had wanted to purchase a US company, they'd have had to move the funds back to America, with all of the tax consequences such a move implies.
- mathattack 13y agoAm I the only one that thinks 15% could be too low? Unless they are rapidly investing in new games, it seems like they're on a "Milk what you have, and buy what you don't" strategy.
- munificent 13y agoJust got word from a friend that the entire Zynga Seattle office is being closed. :( http://www.geekwire.com/2014/zynga-closes-seattle-office/ http://www.geekwire.com/2014/zynga-closes-seattle-office/