Zynga Inc (NASDAQ:ZNGA), in order to cut down on cost, will not renew the contract of the moderators. The company is implementing the cost cutting strategy it mentioned in its third quarter earnings report. The company will ax some moderator position and cease to hire any new contracts.
“As part of the cost reduction program we announced in October, contracts on some outside services, including a portion of our forum moderators, will be allowed to expire. Player support remains a top priority for Zynga Inc (NASDAQ:ZNGA). Forum moderators will continue to be a feature of all Zynga Inc (NASDAQ:ZNGA) games, and players will continue to have access to additional support through email, live premium chat, and peer groups through social channels” says Zynga Inc (NASDAQ:ZNGA)’s statement to Tech Crunch.
Moderators provide customer support to subscribers of Zynga Inc (NASDAQ:ZNGA) and solve the complex queries related to the games on the website. They also report glitches and bugs in games to the development teams.
The decision regarding non renewal of the contracts was first posted on an independent Facebook Inc (NASDAQ:FB) and Zynga Blog. There will be around 150 job cuts in the company. At the time of the original announcement, Mark Pincus said that a total of 5 percent of the operator’s workforce would be laid off. The Boston studio will be shut down. The company also seeks to close its London and Japan studios. There would also be job slashing in the Austin subsidiary and a total of 13 underperforming titles will be closed.
Pincus stated that the cost cutting drive could also see the “significant cuts in spending on data hosting, advertising, and outside services, primarily contractors”.
During Zynga’s earning call for the quarter ending 30 September, 2012, Marcus Pincus admitted that the company has failed to meet its own expectations. The company’s cited reasons for the result were a decline in bookings, delays in new releases, and an unexpectedly faster uptake in Smartphone and tablet gaming.
Zynga’s Mark Pincus wrote that layoffs were the “most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising, and outside services, primarily contractors.” He said that it might prove a tough time for those being laid off, but Zynga, in order to turn the company around and retain its full time employees, is bound to make some tough choices.
The gaming firm’s share fell by 4.9 percent to $2.42 and were up by $0.02 in the after hours of trading.