Zynga To Close Baltimore Office, Consolidate Texas And New York Studios
By Yannick LeJacq | February 26, 2013 8:17 AM EST
Zynga (NASDAQ:ZNGA) is closing down and “consolidating” more of its regional studios as part of the game developer’s mission to reach a financial position of “long term profitability,” the company announced on Monday.
The latest round of restructuring will close an office in Baltimore and consolidate the struggling social game developer’s headquarters in New York and Texas. The Texas offices based in McKinney and downtown Austin offices will be closed, but COO David Ko said in a statement that an unspecified number of employees will be relocated to Zynga’s two remaining offices in the state. New York City offices will be similarly restructured around Zynga’s New York-based mobile studio.
In his statement on the company’s blog, Ko described the restructuring as “an effort to leverage resources as we focus on creating franchises and driving profitability.”
“As all of you know, we’ve talked a lot about one of our key strategies for 2013 is driving long term profitability,” Ko wrote. “With that mindset, we are finding ways to improve our business that position us better for our future success.”
Ko said that Zynga was “relocate everyone in the Baltimore office who requested a transfer, and the overall impact of the consolidations on our team is minimal.”
Ko left the official number of layoffs vague in his statement on the company’s page, but he later told VentureBeat that “these steps will affect approximately 1 percent of our workforce and enable us to focus our resources on the most significant growth opportunities,” an estimate that AllThingsD rounded to about 30 current Zynga employees.
This latest round of layoffs and closures comes shortly after Zynga beat dismal analyst expectations for the company’s fourth quarter earnings. Despite eking out a profit on better-than-expected revenue, David Ko said during a post-earnings report call with investors that Zynga was planning to slim down its operations in order to cut costs and focus on a small number of its most lucrative game properties. Late last year during a high-profile announcement from Apple (NASDAQ:AAPL), the company announced a series of dramatic layoffs and studio closings to correspond with cuts in its full-year financial outlook.
More recently, however, the studio has seen a gradual recovery. Just last week, the company’s stock surged on news that Nevada had signed a bill into law permitting online gambling in the state, capping several months of lobbying and corporate restructuring on Zynga’s part to rebuild itself as a real-money gaming outlet.
“We still have a lot of work to do,” Ko concluded in his statement Monday, “but I’m confident that we’re on the right path to deliver on the potential of Zynga.”
Zynga shares jumped once again during Monday trading on news of the company’s latest round of consolidations, rising more than ten percent to $3.69 per share before falling back slightly to close at $3.44.
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