Zynga Lays Off 150 in Boston & Austin — and Outsources to India (Updated)

Zynga, which lost huge stock value and top-level employees in recent months, closed its Boston office, laid off more than 100 in its Austin studio and outsourced work to India

Zynga closed its 50-person Boston office and laid off more than 100 employees at its Austin studio on Tuesday, a former high-ranking employee told TheWrap.


Executives from the social gaming company's San Francisco headquarters flew to Massachusetts and Texas unannounced and told the more than 150 employees to pack up their belongings.

"The studios didn't know ahead of time," the person said.

CEO Mark Pincus told employees in a memo obtained by TheWrap that he may also close the studios in Japan and the United Kingdom.

He also said he would make cuts to "a small number of partner teams," which may confirm earlier reports that employees were laid off in Chicago, too. The former employee told TheWrap he believed a satellite team of less than a dozen was cut in the Windy City.

"In all, we will unfortunately be parting ways with approximately five percent of our full-time workforce," Pincus wrote in the memo, sent to TheWrap by a Zynga spokeswoman. "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."

A spokeswoman for Zynga declined to comment to TheWrap about the outsourcing to India.

The company broke the news to employees amid the widely-covered Apple iPad Mini event Tuesday morning, in what some have suggested was an attempt to keep attention off the pink slips.

Zynga, which is struggling with plummeting stock prices and a high turnover rate at its top ranks, decided to cut staff that weren't working on active games.

Also read: Zynga Loses Two More Executives

The Boston studio, one of 19 studios worldwide and just three weeks away from launching a mobile game, was completely closed. The game, which has not been announced, was trashed.

The Austin-based teams worked on the two Facebook games "TheVille" and "Bingo." The former employee told TheWrap that Zynga is outsourcing operations for those games to India.

By cutting staff from smaller studios, Zynga executives hoped to reduce the damage to the already ailing company culture, the former employee said.

"It's hard to cut into the core team," the person said. "San Francisco would have been a bigger morale hit. It was in spite of quality."

In March, the company had more than 2,900 employees worldwide, according to Zynga's website. It recently opened offices in India.

Also read: Mark Zuckerberg Touts Mobile Successes, Distances Facebook From Zynga

A former designer at Apple and Sony who now works in Palo Alto, named Justin Maxwell, first broke the news on Twitter after he said his friends were pinkslipped during the much-watched Apple iPad Mini event and given two hours to clear out.

It's been a rough few months for the social gaming studio.

The company lost eight top executives in a series of ousters and resignations, and stock prices have consistently moved downward since its initial public offering in December.

Then, earlier this month, the company projected a weak forecast as it conceded that it overpaid for the mobile app "Draw Something" by millions.

And Facebook CEO Mark Zuckerberg distanced himself from the company in a third-quarter earnings call with investors Tuesday evening.

Zynga stock closed at $2.20, down 5.17 percent.

Updated at 6:50 p.m. ET with statements from Mark Pincus's memo.