Once High-Flying Game Company Zynga To Lay Off 520 Workers

Zynga, the social game maker behind the popular FarmVille franchise, is struggling. It was late getting into the mobile phone market as gamers moved away from computers. It plans to layoff 18 percent of its workforce by the end of summer.

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Things are not going do well for the online game maker Zynga. The once high-flying gaming company has been struggling and now plans to lay off almost 20 percent of its staff; that's more than 500 employees.

NPR's Wendy Kaufman reports.

WENDY KAUFMAN, BYLINE: Not so long ago, San Francisco-based Zynga was hot. Games like Farmville and Zynga Poker were huge hits on the Web, and friends often used Facebook to play. But the world of games is shifting quickly and dramatically - as gamers move away from the computer and onto their mobile phones.

Zynga has been trying to make the transition, but as analyst Charlene Li, the founder of Altimeter Group puts it, Zynga is late getting into mobile.

CHARLENE LI: They were so reliant primarily on that Facebook connection and the social network on Facebook that they have had to develop from scratch on these new mobile platforms, and the competition is pretty fierce. Anybody can develop a game on a phone.

KAUFMAN: Zynga is now trying to conserve resources and by cutting 520 employees, and closing some offices, it hopes to save as much as $80 million.

In a blog post, CEO Mark Pincus wrote: None of us ever expected to face a day like today. But as he put it, the scale that had served the company so well is now making it hard to successfully lead across mobile and multiplatform.

Analyst Charlene Lee adds...

LI: When you're small and nimble it's a lot easier to turn on a dime, and Zynga is a very large organization now; so I think the biggest issue that they have to face is how nimble can they be.

KAUFMAN: Zynga, which went public roughly 18 months ago with an IPO price of $10, ended yesterday's trading day at just about three bucks.

Wendy Kaufman, NPR News.

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