Zynga Axes 100+ Employees
Zynga (NASDAQ: ZNGA) has started a firing spree this week.
According to TechCrunch, the FarmVille maker has shut down its Boston office and laid off a good chunk (two-thirds) of the employees working at its Austin branch.
Zynga has apparently given its former employees just two hours to clean out their desks. They may also be barred from talking about what happened. Without a contract stating that fact, former staffers are likely to hit the Web and start spreading the news, which they might have done anyway.
The saddest part about Tuesday's news is that the Boston office was almost saved. Zynga was reportedly "enthusiastic" about an upcoming product that was ready for release. In the end, the company decided to scrap the project in order to reduce overhead.
That might not have been a bad move. While Zynga cannot turn a profit without releasing new games, its existing lineup is not getting the job done. If this new game was anything like the last, it would have turned out to be another clone of an existing property. And that could only lead to trouble.
As a result of the layoffs, Zynga is down another five percent this afternoon.
TechCrunch believed that there is "still hope for the company if it can find a way to inspire remaining employees to stay and fulfill the company's mission of connecting the world through games."
Investors should not get their hopes up. The CityVille enterprise has been playing that game and singing that tune since the day the company was founded. Zynga is no better today than it was five years ago.
Follow me @LouisBedigianBZ
© 2014 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.