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Zynga layoff 520 employees worldwide; close three US studios

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Zynga’s CEO Mark Pincus today announced that the company would be laying off 18% of their staff; cutting 520 jobs and closing three US studios in the process. Pincus says the finances these layoffs will free up will “offer our teams the runway they need to take risks and develop these breakthrough new social experiences”.

Announcing the job cuts to Zynga employees earlier today via a company-wide email, Pincus wrote “Today is a hard day for Zynga and an emotional one for every employee of our company. We are saying painful goodbyes to about 18% of our Zynga brothers and sisters. The impact of these layoffs will be felt across every group in the company.”

His reasons for the layoffs are that due to the company’s aggressive expansion they’re now in a position that is “making it hard to successfully lead across mobile and multiplatform” and that these cuts “represent a proactive commitment to our mission of connecting the world through games”.

He also claims that making these cuts now is to the benefit of those losing their jobs because acting from “a position of financial strength” and “can take care of laid off employees […] offering generous severance packages that reflect our appreciation for all of their work and we hope this will provide a foundation as they pursue their next professional steps.”

According to a Zynga press release the cuts will save the company “an estimated $70 million to $80 million in pre-tax annualized cash expense savings”. Though, they will still suffer a net loss of “in the range of $39 million to $28.5 million.”

It’s been a bad 18 months for Zynga: last August saw the resignation of Zynga’s COO John Schappert and, then, in October the company closed its Austin studio. Since the rampant success of Farmville they’ve rapidly expanded, absorbing developers, buying up IPs, and opening new studios, but the development has been met with growing yearly losses and smaller successes for each individual game.