
Zynga May Have Just Laid Off 100+ Employees From Its Austin Office - hornbaker
http://techcrunch.com/2012/10/23/zynga-layoffs/
======
danilocampos
Conceptually, I love every bit of bad Zynga news. I like to be reassured that
a company will, in the long term, fail when its products are cynically
designed to manipulate. That a company will fail when their strategy assumes
it's okay to blatantly, consistently, continuously lift design from other
firms and products.

Practically, though, bad Zynga news feels _terrible_. Because the guys who
architected this repugnant exploitation machine _already got paid_. They made
millions selling their stock before the market truly understood what a shit
business they were running. Meanwhile, front-line employees sat with their
plummeting stock locked up.

So any bad Zynga news is nothing more than notice that yet another group of
hardworking folks is, somehow, getting fucked over, despite their leadership
enjoying tremendous rewards.

Very frustrating to watch.

~~~
jmsduran
As a software developer who lives in Austin, I find it disconcerting whenever
I hear about developer layoffs, especially in our city.

I hope this is just an isolated incident of bad company strategy than an
overall industry trend.

~~~
ericabiz
Come to some meetups here in Austin. I can't get through a meetup here without
a company announcing that they are hiring. Especially the more niche meetups
like the Python Web Meetup:
[http://www.meetup.com/austinwebpythonusergroup/events/880678...](http://www.meetup.com/austinwebpythonusergroup/events/88067882/)

My startup is based out of Capital Factory, and if you even just walked in the
door during Friday happy hour and announced that you were a developer here in
Austin looking for a job, hungry funded startup owners would descend on you
like wolves.

All that to say: You have nothing to be worried about. And also, come to more
events...especially ones held at Capital Factory. :)

~~~
StavrosK
Python Web development is still niche? Are any of these companies looking for
remote work, by any chance? :-P

~~~
jes5199
There's some serious the-future-isn't-evenly-distributed stuff going on with
programming languages and cities. I have a friend in Memphis who tells me that
Rails is just starting to get noticed there (!)

------
pud
Startups are hard.

Even big startups are hard. Zynga is startupy, even though they're public.

There's a lot of schadenfreude on HN when it comes to Zynga. Articles about
Zynga's problems regularly make it to the top of HN.

Some people think games are frivolous. They're not. Entertainment is (almost)
a basic human need. Some people think Zynga players are somehow being tricked.
They're not. They're being entertained.

Some people say that Zynga steals ideas. Firstly, I'm guessing 99% of the
people who say that are just repeating something they've heard. The other 1%
should know that everyone steals from everyone. Unless you're the first guy to
ever make a dynamic website, have usernames, top-bar navigation... you stole a
lot of ideas too. And the ideas you stole are more fundamental than the plot
of a game.

(also, if you know my history (i used to make fun of companies like this for a
living) yes, i understand the irony of me writing such a supportive comment.)

~~~
comlag
I agree with the almost all your points except about them stealing ideas.
Ripping off the same game from indie developers is wrong. It isn't them using
basic ideas like a top nav or usernames, there are examples of them copying
entire games[1]. 1\.
[http://www.forbes.com/sites/insertcoin/2012/01/25/everything...](http://www.forbes.com/sites/insertcoin/2012/01/25/everything-
wrong-with-zynga-in-one-image/)

~~~
pud
> It isn't them using basic ideas like a top nav or usernames

By "basic ideas" I assume you mean "ideas that are better and more useful, and
therefore more widely ripped off."

Your argument reminds me of when people say such-and-such band is so original
-- yet it's another four guys playing guitar, bass, drums and vocals.

~~~
comlag
My argument is that Zynga stole another band's style and lyrics but changed
the presentation slightly. They did not build on the 'basic ideas' like having
a certain set of instruments.

------
alaskamiller
The irony of all this is that just less than 3 years ago Mark Pincus and Zynga
was riding high.

Pincus was voted as the CEO of the Year at the Crunchies. He was chosen to be
the closer to Startup School, he projected Zynga as a place for people to want
to go to there: <http://news.ycombinator.com/item?id=1041758>

This is a story parallel to Lance Armstrong's own rise and fall. About how if
you were to drill down, really drill down, to find the next ethical,
justifiable company that used Facebook to great benefit for humanity you're
going to be looking for the 27th, 28th, 29th place organizations. Because
frankly, as cynical and as well-duh it is now, what did we spend the greatest
of our generations will and brain power on?

A Facebook ponzi scheme.

Now the tide is turning, pendulum swung, omega alpha etc etc and all those
wonderful metaphors.

Where to go now? Go fixate on and fix something else. But remember, be nice to
everyone on your way up. They're going to be the same people you see on the
way down.

~~~
bduerst
That's not what a ponzi scheme is.

~~~
DanHulton
Word.

Awful, Zynga is.

A ponzi scheme, it is not.

Let's keep our criticisms to what is correct - there's _so much_ of that to go
around already.

~~~
tatsuke95
While I agree "Ponzi scheme" is tossed around a bit too liberally, Zynga is
pretty close:

 _A Ponzi scheme is a fraudulent investment operation that pays returns to its
investors from their own money or the money paid by subsequent investors,
rather than from profit earned by the individual or organization running the
operation._ (Wiki)

The fact that the early investors cashed out like kings from the IPO, and
later investors shouldered all the losses and may not even recover the
liquidation value of the assets is pretty close to the definition. All that is
missing is the "fraud" part, but that's a bold accusation and hard to prove.
Then again, this story isn't over.

~~~
bduerst
Cashing out at an IPO isn't a ponzi scheme - it's selling assets directly to
new investors.

Just because the new investors were not smart in their investment does not
make it a ponzi scheme.

~~~
tatsuke95
A Ponzi scheme inolves paying returns to investors out of the investment
capital of subsequent investors. That's the definition.

The executives and VCs of Zynga built up a product and took their returns from
the public by selling the public shares, which is a right to the future
profits of the company[1]. Only, it turns out that those with the best
knowledge of the inner working of the company probably knew there were no
profits to be had, nor any on the horizon. This is made evident by the inside
selling and relatively fast decline of the the company's share price.

So, while I don't go around claiming Zynga (or any such bust up) is akin to
Madoff, I don't think the difference is as large as you think. It's all about
intent, and we'll never really know. The rest of the pieces are there.

By the way, I'm long Zynga January 2014 calls. They may have been the
recipient of loose SV money, and as such got lazy, but there is demand for
this product if they can get it together. There's a real business here, so I
guess I'm in the non-Ponzi crowd.

[1]If you aren't investing with the intent on earning the future profits of
the company, but instead are looking to sell at a higher price, you are
_speculating_ , not investing. I don't feel sorry for speculators, it's the
nature of that zero sum game.

~~~
bduerst
By your convoluted logic, the entire stock market is a ponzi scheme.

Buying a share _does not_ give you the right to future profits in a company.
It gives you ownership and control over a percentage of the corporation, and
does not guarantee a dividend.

By selling shares to the public, the shareholders are trading control of the
company for money with the public investor. Whether or not they bought a lemon
is the fault of the public investor.

It is _not_ a ponzi scheme, it is the exchange of assets. __

~~~
tatsuke95
> _the entire stock market is a ponzi scheme_

It isn't "my logic", it's the definition of a Ponzi scheme: early investors
were paid out by later investors, with the bottom falling out for the later
investors. That hasn't happened, because the story is still unwinding. It
might not ever happen. It will only be obvious in hindsight.

Besides, I own many stocks, and they return income to me.

> _Buying a share does not give you the right to future profits in a company.
> >it gives you ownership and control over a percentage of the corporation_

For someone critical of "logic", those two statements contradict each other.

A company is expected to be profitable, and owning a stake in it entitles me
to a share of those profits. What do you think Zynga is promising when they
sell me a share of the company at IPO? Do you really think they are saying,
_"Here's part of this company. It might make money, or it might not, but
perhaps someone will buy it from you for a higher price at a later date"_?

Good luck with your portfolio if you base it on a different philosophy.

> _Whether or not they bought a lemon is the fault of the public investor._

Well, I'm sure the SEC would disagree with you on that statement.

> _It is _not_ a ponzi scheme, it is the exchange of assets._

One does not preclude the other. Ponzi's original fraud involved the exchange
of assets. The scam is in what they tell me the asset is worth and what it is
actually worth.

~~~
bduerst
>It isn't "my logic", it's the definition of a Ponzi scheme: early investors
were paid out by later investors, with the bottom falling out for the later
investors.

 _Definition [1]: A form of fraud in which belief in the success of a
nonexistent enterprise is fostered by the payment of quick returns to the
first investors from money invested by later investors._

This _is not_ what selling stock in an IPO is because stock is not non-
existent. A share of equity is a very real asset. You are committing a No True
Scotsman fallacy by trying to redefine the term to fit your needs.

>Besides, I own many stocks, and they return income to me.

Just because you own equity does not mean you are an expert. Case in point:
You don't know the difference between company net income, returned earnings,
and dividends.

>A company is expected to be profitable, and owning a stake in it entitles me
to a share of those profits.

No it does not entitle you to a share of any net income.

All it entitles you to is vote of power. This is _how corporations_ work. It's
basic business, for christ's sake. [2]

>Well, I'm sure the SEC would disagree with you on that statement.

Why? Did Zynga falsify an annual filing or their 10-k? No? Then the SEC
doesn't give a shit.

>One does not preclude the other.

Yes, it very much does, because in a ponzi scheme you give up your money to an
investor for their service. In an IPO, you give up your money for shares of
equity, which you sell later.

I'm not going to go in circles with you on this any longer. You've either have
a case of confirmation bias or you're trolling. It's a shame because you're
another example of a rational but unintelligent investor.

[1]
[https://www.google.com/search?oq=define%3Aponzi+scheme&s...](https://www.google.com/search?oq=define%3Aponzi+scheme&sugexp=chrome,mod=0&sourceid=chrome&ie=UTF-8&q=define%3Aponzi+scheme&safe=active#hl=en&safe=active&q=ponzi+scheme&tbs=dfn:1&tbo=u&sa=X&ei=WEeIUO2CEInciQLxpoG4CA&ved=0CB4QkQ4&bav=on.2,or.r_gc.r_pw.r_cp.r_qf.&fp=80ef5323c76d6b79&bpcl=35466521&biw=984&bih=664)

[2] <http://en.wikipedia.org/wiki/Equity_(finance)>

~~~
tatsuke95
> _This is not what selling stock in an IPO is because stock is not non-
> existent. You are committing a No True Scotsman fallacy by trying to
> redefine the term to fit your needs._

Wait a minute, you looked up a definition that used the specific term _non-
existent_ to bolster your argument, then accuse me of warping the definition?

In fact, there have been a variety of "Ponzi Scheme's" over the years, some of
which have used stock, bank deposits and land.

> _Case in point: You don't know the difference between company net income,
> returned earnings, and dividends._

Huh? Okay.

> _Why? Did Zynga falsify an annual filing or their 10-k? No? Then the SEC
> doesn't give a shit._

I was talking about your statement, which is that:

"Whether or not they bought a lemon is the fault of the public investor."

Completely false, mainly because the public information is _provided by the
company_. By the way, the SEC _has_ looked into Zynga.

> _I'm not going to go in circles with you on this any longer._

Good. I'm sure it's been exhausting for you, looking up all these finance
terms on Google. Between the arrogance and personal attacks, you're not adding
much here.

------
edash
Hey Zynga people, we're based in Austin and hiring for front-end. And our
culture is pretty much the anti-Zynga: bootstrapped, slow growth, sane hours,
no deadlines, strong design focus, and respect for our team and our customers.

Let's get coffee at the downtown Medici:
<http://www.paperlesspipeline.com/jobs>

~~~
codegeek
Great design and love your jobs page. Very well written and quite refreshing.
Not qualified for this personally but may be some day.

------
untog
During the Apple event, no less. Maybe I'm very cynical, but that seems like a
deliberate attempt to bury the story.

~~~
mkinsella
Which is exactly the opposite of what will happen. People are talking about it
more because they tried to bury it during the Apple event.

~~~
untog
We are, but we're hardly a major news destination. No mention of it on NY
Times or BBC (still early days, admittedly), but look at The Verge homepage:

<http://www.theverge.com/>

Top bar is _all_ Apple. Zynga story is an entire page scroll down.

~~~
mobweb
This might also have to do with the fact that the story isn't really confirmed
yet...

------
eekfuh
The general consensus is that they timed it to coincide with Apple's
announcement, so that the news of them laying off employees would be buried by
all the Apple press.

~~~
gamble
I think it has more to do with getting the cuts out of the way before their Q3
earnings report comes out tomorrow. Facebook just mentioned in their earnings
call this afternoon that they've been hit by a 20% YoY drop in revenue from
Zynga, so you know Zynga's results are going to be bad.

------
Karunamon
That ship is sinking fast. Heart goes out to those who are now out of work,
but a part of me can't help but be glad that the "exploitative spamming social
games" market might be dealt a mortal wound.

------
duck
Based on this I don't think they'll have a hard time finding new employment:

[https://twitter.com/search/realtime?q=zynga+%22ping+me%22+OR...](https://twitter.com/search/realtime?q=zynga+%22ping+me%22+OR+message+OR+hiring&src=typd)

~~~
donretag
Very few of those are for Austin. Many are from CA/NY companies.

~~~
thwest
Very few Zynga employees were from Austin, many are from CA/NY.

~~~
bostonpete
The article only mentions layoffs from the Austin and Boston offices...

------
mkinsella
Also rumored to have shut down their Boston and Chicago offices.

~~~
GabrielF00
The Boston office did the Adventure World game. I tried it out and found it
pretty frustrating - you can only do a few things before you run out of energy
and need to harrass your friends or wait 24 hours. It's not a mechanic that
works well with an adventure - nobody wants to chop through a few bushes and
then wait to enter the temple. Plus there's this gratuitous Indiana Jones
thing which is just glommed on.

~~~
Karunamon
>you can only do a few things before you run out of energy and need to harrass
your friends or wait 24 hours

This is a theme that exists throughout most Zynga games.

~~~
GabrielF00
The difference I think is that in a sandbox game doing a handful of things
every eight hours or so can feel fairly satisfying but in an adventure game
there's a sort of story and you're interrupting it after you're just getting
started.

------
dkrich
I'm surprised to see so many people suggesting that Zynga's problems are
purely moral. I think that gives them too much credit. I personally have no
problem with their business practices from a strictly moral point of view.
Caveat Emptor.

No, for me the problem is much simpler. Its a shitty business run by very poor
business minds. That may sound dramatic and sensational, but let's consider
the facts: they paid $250 million for a company of 15 developers whose most
valuable asset was a mobile version of Pictionary that had been on the market
for just three months. Completely unprofitable, they built a multilmillion
dollar state of the art office in San Francisco. That's something you do when
you are wildly successful, maybe. I work for a company many orders of
magnitude more successful than Zynga and our office looks like a dungeon. So
what? That's being wise with cashflow. That's a company I want to invest in.
Finally, a friend of mine works for Zynga and he was regularly taking all
expense paid trips. For his one year anniversary he was sent to England and
Ireland as a reward.

I don't think of Zynga's management as sinister evildoers. I think of them as
immature and completely unfit to manage a company. I say good riddance but I
do hope those laid off find better opportunities soon.

~~~
gm
I'm gonna call bullshit on your friend's claim of all expense paid trip purely
as a one year anniversary gift from Zynga.

Here is when you get such perks at Zynga:

\- You win some sort of company-wide award at the quarterly meeting. You (or
your team) did something awesome and you are getting rewarded.

\- You get a big quarter-end cash bonus and you spend it on your trip.

\- It's not actually a vacation. You are on a business trip and maybe you
convince your manager to delay your return and you take off for vacation time
at that time.

\- 25% of your stock options vest on your first anniversary and you cash in
and spend on your trip. Assuming you got a boatload of options if you take
into account the stock price.

That's all I can think of.

But what DO you get as a prize for your one year anniversary? Some studios put
your name up on a poster... That's about it. The rest is by merit.

And as to your immature and completely unfit comment: I call bullshit on that
as well. People like that do not get the type of funding that Zynga got. They
do not get superstars on their board like Zynga does (Reid Hoffman, Bing
Gordon, Jeffrey Katzenberg, etc). And people like that definitely do not get a
company to go public. So, yeah, I call bullshit.

~~~
dkrich
I think if that's the only point in all that which you find fault with, then
my point is pretty well proven.

Oh, and you can point at the board of directors and all of their past
successes as if that somehow proves that the company is well run. I can point
at the balance sheet and stock price. Facts are stubborn things.

~~~
gm
At the end of the day critics are a dime a dozen. This is not the forum nor do
I have the time nor do I care enough to argue, so I won't bother to poke holes
in your logic.

------
dave1619
It seems to me that Zynga's biggest mistake was 1) not expecting that social
gaming craze to take a dive and 2) not figuring out early enough what to do
next when the social gaming craze died down ... those two things are related.

So rather than predicting and pre-empting the dive in social gaming, Zynga is
in a tough situation where they're facing the harsh reality as it comes. As a
result, they're stuck with a huge, bloated company not prepared to quickly
pivot or create innovation in new product categories.

I don't know what else Zynga can do right now but to downsize and to refocus
the company on building what's next and not what was. It's almost like they
need to find a new product strategy and business model. And it will take a lot
of insight, leadership and team to get it done.

What they have going for them is that they have a lot of cash and a lot of
experience in the social gaming genre.

But what they have going against them is momentum which includes employees
losing faith in the company.

~~~
tatsuke95
> _"So rather than predicting and pre-empting the dive in social gaming"_

I agree with your post, outside of this.

They most definitely predicted it, and cashed out their stock to benefit from
it. How else do you explain them cashing out so much, so early? That's the
hard part for me to get over.

Other than the shadiness of the VCs and execs, Zynga was a decent idea that
didn't work out, like so many before it.

------
ericz
I don't know why everyone is so critical of Zynga trying to hide this news
among the Apple stories -- what is the argument for not doing so? "Hey guys,
lets make sure EVERYONE hears that we're closing down offices and laying off
employees, this is going to be important"

Would you have acted differently?

~~~
jfoutz
Lay them off last friday and save your shareholders a man-year of salary?

------
sdoowpilihp
If any of the Zynga engineers are reading this article, we are looking for a
few good engineers where I work. We develop with Unity3d and Obj-c for the
front end, and Scala for the back end. We also are willing to consider remote
for great candidates.

careers@bentoboxinteractive.com

~~~
tayl0r
Why don't you guys put some stuff up on your website? Every section is just
empty. As an indie game developer using Unity3d (and funnily enough an ex-
Zynga employee too) I wouldn't even bother contacting your studio when every
section of your site is just empty.

------
jfernandez
Way to try sweep it under the rug by announcing it during all of Apple's
product news. Classy act Zynga.

~~~
TimGebhardt
Because other companies don't announce news on Friday at 4:00pm...

Or because the White House doesn't make important news announcements on
Christmas Eve when nobody's paying attention...

I don't think this is a Zynga dick-move. I think this is a typical company
move to bury a non-flattering story.

~~~
Spoom
The fact that other organizations also make dick moves does not negate this
dick move.

~~~
wilfra
Is it a 'dick move' that Apple releases their products at a time calculated to
get maximum media exposure? Or that every other smart company in the World
also times bad news?

There are many things one might accurately criticize Zynga for, but this is
not one of them. If they hadn't done it this way investors would have yet
another reason to sell the stock, it would be evidence the company is run by
idiots.

~~~
lazugod
Hiding information is worse than spreading information, yes.

------
kylelibra
Has this been corroborated outside of that tweet yet?

~~~
becojo
I'm also waiting for this. I feel suspicious even though it wouldn't surprise
me much from Zynga.

------
DigitalSea
This was bound to happen. What goes up and steals other companies designs and
game ideas must come down. It's unfortunate the front-line employees who
worked for Zynga and only did as they were asked and weren't the perpetrators
for coming up with game designs to rip off have been shafted in this
situation.

They're nothing more than a money hungry company that deserves to perish. The
real question here is: will this have a knock on effect for Facebook stock and
perhaps have a chain reaction?

If I were Facebook I'd seriously be considering an acquisition and then
priority number #1 being turn the image of Zynga around, perhaps even re-brand
to Facebook Games.

------
colinbrauns
If I were them, I'd head straight to the bar. I'll buy a few rounds for anyone
who got laid off in Boston because... that just sucks. I also recruit for 100+
local startups, and can help you transition.

------
msds
Is anyone else unable to access the article? I'm getting 404s - although this
exact url is linked from the front page. It's techcrunch, so this must be a
sign of interesting politic.

------
jasondenizac
I feel bad for all the Zynga people. Not for being so unceremoniously let go,
but for the flood of recruiting emails they'll be receiving already. Good
luck, people!

------
niggler
Good to see Zynga starting to focus on profitability ...

~~~
donretag
Exactly. Zynga laid off employees from a failing division? What's the problem?
Who cares when it happened. Those employees should have seen the writing on
the wall.

------
davidcee
It is just me , but do you need 3000 + people to run a social gaming company ,
even if it is a big one ? Sorry for those that have been fired , but didn't
anyone put the brakes on the hiring somewhere along the track ? That payroll
must be mind-blowing.

------
tb303
I just can't believe that my tweet launched the entire story. That was insane.

My friend IM'ed me at 11:27a PST yesterday saying "Dude, my whole studio just
got laid off. We have 2 hrs to vacate. Can you email someone?" Hit twitter,
and it was off like a rocket.

------
hiddenstage
Farmville was a great social game and their Words with Friends acquisition was
very good... then they started making Farmville clones, blatantly ripping off
competitor's games, and paid $200 million for Draw Something.

~~~
bduerst
Farmville was a blatant ripoff of _Happy Farm_ \- it just happened to be the
first clone to hit the U.S. market from China and be successful.

~~~
nekojima
Which was a ripoff of the classic mid-1990s SimFarm.

~~~
mey
Not sure I would call SimFarm (SimAnt or SimIsle) classic. SimTower on the
other hand.

~~~
Danieru
SimFarm was a classic but rather I'd hesitate to call FarmHappy a SimFarm
clone. SimFarm is perhaps the most complex Sim game, I had an easier time with
even SimIsle. Gameplay wise there is almost no intersection.

What disappoints me about the current social gaming genre is how many games
what would have otherwise been decent tycoons are ruined with slot machine
mechanics.

~~~
egillie
I've been wondering what the big deal is since these games just reminded me of
Tycoons anyways, but you have a point with the "slot machine mechanics"
bit...though the Tycoons could get pretty slot machiney. I think a lot of the
backlash is the fact that these are popular with casual or non-gamers, so they
have an image problem with "real" gamers.

You're the first person I've "met" who got SimIsle. Maybe I need to give it
another try...

------
imadethis
Not a big surprise, especially after having spoken to a few people that have
worked at Zynga before. High turnover of employees, quality over quantity,
etc. Can't say I'll miss their products or their techniques.

------
dreamdu5t
I forgot I'm living in a world where people equate jobs with prosperity.

------
williamle8300
...It's interesting how companies like bring their skeletons out on the days
Apple makes their product announcements.

Sort of softens the blow of it; at least a lot attention is diverted to
Cupertino.

------
tayl0r
Any idea what kind of severance package the developers received?

------
Reebz
Startups are risky beasts, but this action appears to lack backbone and tact.

This concerns me because this is Zyngas leadership tone on display. It does
not invoke confidence.

------
tbranyen
Zynga is clearly a household brand you can trust.

------
leothekim
Done during the iPad Mini rollout no less, while the press was distracted.
Nice one, Pincus.

------
nvr219
Zynga is such an horrible company.

------
rapind
With classy moves like this, I can't understand why we all hate on them so
much...

------
kinnth
really gutted for the talented people who work there. 100 people have to find
jobs tomorrow, that's never easy.

