Less than a month ago, Marc Pincus returned as CEO of the company he founded, online game company Zynga.
Today, the company reported earnings for the first time since he reclaimed the helm, and while investors were pleased with the numbers and sent the stock up almost 7% after hours, Pincus had to deliver some bad news — the company is laying off 364 people, or 18% of its staff.
On the earnings call, Pincus explained that he wanted to return Zynga to its more nimble roots:
I’ve been encouraged in my first few weeks by the level of talent and commitment throughout our company. But, I’ve also heard teams express frustration. They want to move faster and take more shots on goal.
In order to win, we need to return to our entrepreneurial roots with leaders and teams empowered to drive outcomes. We’ve seen that across our industry – and in the early days at Zynga – tighter, more nimble teams can drive faster innovation and deliver more valuable experiences for players....
We need to be more resourceful in how we manage our costs in order to fund our investments in great new games, people and data analytics. We’ve over-burdened our game teams with complexity and centralized expenditure.
The cuts are expected to save Zynga more than $100 million per year. More important, Pincus believes, they'll help Zynga move faster and take more shots to make the hit games that are necessary to revive the company's fortunes.
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