Zynga Fires 520 Staff, Closes Draw Something Maker OMGPOP

Zynga, the social game maker responsible for hits like FarmVille and CityVille has sacked 520 staff and closed several of its US-based offices.

In a press release, the company announced it was aiming to make between $70 million and $80m in savings, resulting in the sacking of 520 staff, which constitutes around 18% of Zynga's global workforce, and the closure of offices in Los Angeles, Dallas and New York. Zynga's New York office houses OMGPOP, the maker of Draw Something which Zynga purchased in 2012 for $200m.

Zynga also updated its outlook for the second quarter of 2013, predicting net losses of between $28.5m and $39m and speculated that bookings would be in the lower half of of the $180m to $190m the company predicted in April.

As a result of the announcement, Zynga's share price dropped 12% just before the NASDAQ closed yesterday, from $3.41 to $2.99. The closures and redundancies are expected to be complete by August.

In a company meme, Mark Pincus, CEO of Zynga, said the cuts marked a "hard day" for the company:

"Today is a hard day for Zynga and an emotional one for every employee of our company. But I think we all know this is necessary to move forward. The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played."

Severance

Pincus added that all employees affected by the cuts woud receive "generous severance packages."

Zynga is now looking to completely restructure its business after its share price fell 75% during 2012 and masses of players abandoned its online games. The developer has now severed its exclusivity deal to make games for Facebook and partnered with gambing giant bwin to produce real-money gambling games for the UK.

Zynga has also applied for a gaming license in Nevada and is looking to introduce real-money games to the US.