Belfast Telegraph

Home News World

Game firm's British jobs at risk

British staff at online game company Zynga are facing possible redundancy after the firm announced plans to shed games, offices and jobs, in a drive to cut costs.

The maker of social media games including FarmVille and Texas HoldEm Poker said it would axe about 5% of its full-time workforce.

Zynga also said it would get rid of 13 older games and reduce its investment in the game The Ville. It will close its studio in Boston and may close offices in Japan and the UK. It runs 18 offices worldwide.

It is the first round of redundancies at Zynga, which is based in San Francisco and has about 3,200 employees. The UK office is in Farnham, Surrey.

Its slumping stock rose more than 3% in aftermarket trading following the announcement, which came a day ahead of Zynga's third-quarter earnings report.

The stock probably also got a boost from a better-than-expected earnings report by Facebook, on which Zynga is by far the No 1 gaming company.

Zynga said earlier this month that it expected to post a third-quarter loss due to weak demand for some of its titles. It said its revenues would probably be nearly flat compared with the same period last year. The company also previously announced that it would adopt some broad cost-cutting measures to help improve its performance.

Chief executive Mark Pincus said the job cuts were the most painful part of the overall cost-reduction plan, which also includes significant cuts in spending on data hosting, advertising and use of contractors.

Zynga makes five of the 10 most popular games on Facebook, according to researcher AppData. In the latest quarter Zynga accounted for 7% of Facebook's total revenue, down from 10% in the second quarter and 12% in the third quarter of 2011.

The company went public in December at 10 dollars a share and its stock price peaked in March at 15.91 dollars. The stock has lost about 85% of its value since then.

Popular

From Belfast Telegraph