In a further sign of trouble at Zynga, news has surfaced that the social gaming company has just laid off more than 100 employees in its Austin office. A tweet from Justin Maxwell, a former designer for Apple, Mint, and Sony, indicated that the layoffs happened to his friends just as the Apple event was taking place.
Update: We’ve heard from a source with first-hand knowledge tells us that the layoffs did happen in the company’s Austin office. Additionally, The Ville will be discontinued. More than 100 employees were let go and ordered to turn in their computers, phones, and badges — many of whom have been working at the company for more than two years.
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The ending of The Ville most likely has to do with the fact that software giant, EA had filed a lawsuit against Zynga for copyright violation. As Maxis General Manager Lucy Bradshaw said at the time, “…when The Ville was introduced in June 2012, the infringement of The Sims Social was unmistakable to those of us at Maxis as well as to players and the industry at large.”
Employees affected by this change were given two hours to vacate the office. Austin initially was thought to be one of several offices affected by layoffs today. Gamasutra had heard that the company’s Boston office was also being affected and may even be shutting down.
The surprise announcement is happening right when most of the media in the industry are right now paying attention to Apple’s product news. This appears to be a classic media strategy of announcing bad news when someone else is dominating the current narrative. Apple’s press party will deluge Zynga’s bad news, even as the company’s firings would have been a sensation on a different day.
Zynga has struggled of late, writing down more than $90 million of its OMGPOP acquisition, as that firm’s key game lost steam. Its stock has suffered greatly, executives have left the firm, and morale is reportedly low. Today’s news is unlikely to help.
At the time of writing, Zynga’s share are down nearly 5%.
We’ve reached out to Zynga for comment but haven’t heard back yet.
Top Image Credit: Ben Watts