Zynga and the Terrible, Horrible, No Good, Very Bad Day

zynga, social gaming, social networks,As Apple commanded the tech world’s attention earlier today, Zynga broke some bad news to its employees: Hundreds of them were being laid off, and The Ville was being sent out to pasture, as sister blog Inside Social Games reported.

The company later confirmed the layoffs, releasing a letter that CEO Mark Pincus had sent out to staff. In it, Pincus said Zynga would shutter 13 games, close the Boston offices and reduce staffing in Austin. The company is also considering closing its offices in Japan and the UK, Pincus said. All told, the workforce will be reduced by 5 percent.

Later in the day, during Facebook’s generally upbeat earnings call, CEO Mark Zuckerburg singled out Zynga’s games as the blemish on the company’s otherwise successful quarter.

“Gaming on Facebook isn’t doing as well as I’d like,” Zuckerberg said. Payments revenue from Zynga decreased 20 percent, but monthly payments from ecosystem increased 40 percent over the last year, the Wall Street Journal reported.

Zynga has been struggling since it reported weak second quarter earnings.

Pincus called the layoffs “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.”

“These reductions, along with our ongoing efforts to implement more stringent budget and resource allocation around new games and partner projects, will improve our profitability and allow us to reinvest in great games and our Zynga network on web and mobile,” he wrote.

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