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Zynga lays off 5% of staff; Boston studio closed, Japan and UK may follow

Zynga has confirmed major lay-offs, at least one studio closure and the possibility of more to follow, as well as the shut down of 13 games.

Zynga issued a statement confirming the cuts and closures following a day of heavy rumours suggesting it had shuttered its Boston studio and made cuts at the Chicago office.

Numerous Boston-area developers reported the news on Twitter that Conduit Labs, known as Zynga Boston after a buyout, had been closed. Massive layoffs at Zynga's Chicago office are also being reported, with Gamasutra confirming that Zynga has made massive cuts at its Austin-based studio with over 100 employees laid-off.

Zynga's Austin office is behind the Facebook game TheVille, while the Boston office was responsible for the Indiana Jones Adventure World game on the social network.

The news started circulating while Apple's press conference was occurring today, where the iPad 4 and iPad Mini were announced along with a slew of Mac news, before Zynga made it official.

CEO Mark Pincus issued the following statement:

Earlier today we initiated a number of changes to streamline our operations, focus our resources on our most strategic opportunities, and invest in our future. We waited to share this news with all of you until we had first spoken with the groups impacted.

As part of these changes, we’ve had to make some tough decisions around products, teams and people. I want to fill you in on what's happened and address any concerns you may have.
Here are the most important details.

We are sunsetting 13 older games and we’re also significantly reducing our investment in The Ville.

We are closing the Zynga Boston studio and proposing closures of the Zynga Japan and UK studios. Additionally, we are reducing staffing levels in our Austin studio. All of these represent terrific entrepreneurial teams, which make this decision so difficult.

In addition to these studios, we are also making a small number of partner team reductions.

In all, we will unfortunately be parting ways with approximately 5% of our full time workforce. We don’t take these decisions lightly as we recognize the impact to our colleagues and friends who have been on this journey with us. We appreciate their amazing contributions and will miss them.

This is 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.

Zynga made social gaming and play a worldwide phenomenon, and we remain the industry leader. Our success has come from our dedication to a simple and powerful proposition – that play is not just something people do to pass time, it’s a core need for every person and culture.

We will all be discussing these difficult changes more with our teams and as a company. Tomorrow, Dave and I will be hosting a post-earnings webcast (details to follow) and next week we will be discussing our broader vision and strategy during our quarterly all-hands meeting. I’m confident this puts us on the right path to deliver on the promise of social gaming and make Zynga into an internet treasure.

All the best to all those affected by the cuts.

Thanks, Silicon Alley Insider.

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