Zynga to Lay Off 520 Employees and shutter NY and LA Offices | Hacker News Reader

Zynga to Lay Off 520 Employees and shutter NY and LA Offices

allthingsd.com

408 points_pius285 comments

Good thing Pincus sold off a bunch of stock [1] -- $190mm worth [2]. Even better, he sold it before the employee lockup expired [3]. Living like a boss == fuck you money in the bank, instead of locked up in a company like suckers (employees and investors). From the stock charts [4], it looks like it closed opening day at $9.50, Pincus and insiders dumped at $12, and if you're a regular employee w/ a 6mo lockup that presumably expired 16 Jun since the company opened 16 Dec 11, you've never seen a price higher than $6.

ps -- dear employees and investors: your ceo dumping big blocks of stock is probably a negative signal

[1] http://online.wsj.com/article/SB1000142405270230472440457729...

[2] http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-kee...

[3] http://www.huffingtonpost.com/2012/07/31/zynga-insider-tradi...

[4] http://www.google.com/finance?cid=481720736332929

updated to include pricing. Again, selling at 2x your employees == living like a fucking boss.

Completely agree with you on this. A CEO dumping a large amount of stock is usually (but not always) a sign of bad things to come and sends a negative signal to the market.

... but exec share dumping is not unusual and happens like clockwork at most companies despite market conditions. Typically execs sell off their shares on a preset schedule, they sell as much as they can as soon as they can because of the bird in hand and all that. The truly evil execs are those that sell-sell-sell as much as they can while telling their employees to hang onto their shares and wait.

there are so many negative signals from Pincus that its hard to count. in particular, you missed the place where he screwed the employees before the IPO as well.

Woah -- I did not know this happened. Thanks for taking the time to provide sources.

While I feel bad for the employees, some investors should have known better. It was over priced at $12.

It's hard to feel bad for the employees. Unless it was their dream job to work on manipulative valueless flash games that spam people on Facebook, they chose their place of work for all the wrong reasons.

It was over-priced at $.01, apparently

should have bought some puts

You know what the problem here is? There is no material difference between a 10 person game studio and a 3000 person game studio. Zynga likes to pretend that their Z-Cloud gives them an advantage over their competitors. Maybe it does in terms of operations, but games isn't an operations business, it's a hits business. All of the optimization in the world doesn't help if you can't keep making wins and Zynga can't make wins because they're too cluttered with layers of middle management FUD.

520 employees is a lot of people out of work, but I have to think they saw it coming. My advice to people in similar positions all throughout tech is this: there are three signs that indicate an impending downsizing.

* Depressed Stock Value over long periods of time

* An Acceleration of secrecy and fiefdom claiming within the culture

* You look around and no one wants to come to work anymore

If you find yourself in this situation, leave. Find another job. Being caught in a downsizing sucks, but if you pay attention you can avoid them. It's important to make friends and to be able to tell the temperature of your local environment to avoid such devastation.

Edit: This can best be summarized as the well known phenomenon: "There's no such thing as a Free Lunch".

Being caught in a downsizing sucks

Or it can be a great. Severance packages can be quite lucrative.

The better advice I give people is "always be looking for job opportunities". The best job opportunities come when you least expect them, and the worst jobs are taken when you're desperate.

the worst jobs are taken when you're desperate

If I could suggest one thing for a young programmer to tattoo onto their inner arm, it would be that sentence right there.

I took a really shitty job so I could be close to someone in a country. I had it for almost two years. The job wasn't worth it. But the person in question was.. ten folds. Now, we're trying to settle down, but fixing the job/security situation.

That being said, I am always skeptical at things pointed out as job security.

Problem is they usually are actually desperate...

Being aware of being desperate and what that means will at least allow people to make more informed desperate choices.

you're right. It's usually the least experienced and/or those with visa issues that get trapped by this.

But if it's tattooed on their arm, they can remember it when they are not, and prepare accordingly.

Decent programmers in big cities have no reason to be desperate.

Not now, but deep recessions can happen even in big cities. Nobody is as invincible as they feel.

Didn't we just go through a deep recession? Decent programmers in big cities had nothing to worry about!

Nothing is absolute, if our society collapses, then yeah, programmers might not have an easy time finding a decent job. Short of catastrophic problems, I think programmers are in good shape for a long time.

In this case, Zynga offered us 3 months + 1 week/year.

dont forget,that many people who chose not to sign the legal document were able to negotiate a better comp package.

my friend got 6 months after talking to HR and agreeing to sign the doc. remember, no one asks you to sign something for your benefit :)

What was your reaction to this offer, if I may ask?

Did you think it was fair? Did you think you were ripped off? Angry? Sad? Depressed?

I've left a few jobs but always on my own accord, so I'd appreciate having a glimpse of the psyche in going through an involuntary departure.

It's a generous payout. The cuts seem indiscriminate when I look at all the talented people being cut. I imagine that it is hard to surgically remove 20% of your workforce.

Right now, I'm torn between looking for work immediately and asking for a delayed start, or going on vacation now and looking for work when I get back.

All I know is that Mars Bar (the local bar) will be busy tonight.

I took a few months after my last resignation and it allowed me to really think clearly without the daily distractions of corporate life. It really let me reexamine my priorities and how I want to live going forward, so if you're (a) comfortable financially (I had few if any financial obligations) and (b) are confident in your ability to find a good role in the future, I can vouch for the mental benefits of just taking it easy for a few months, even if you don't do anything "special".

Oh, and thanks for sharing your perspective with us!

I'm not sure what 3+ months' salary is for you, but I was able to live for a year in NW Thailand for $20k. I wouldn't be the person I am today had I not done that.

As an aside, this is why the US should have longer mandatory holiday. Taking a vacation would be the last thing on my mind if I was laid off, but our country has 5 weeks of semi-paid holidays a year.

Good luck with your decision, I'm sure you'll land on your feet.

Look for work immediately. Negotiate a delay start.

I would say get stuck in a downsizing. It is great. You are either going to get a salary increase, acceleration, or more equity so they can retain you. You can often negotiate a bit here.

Or, you are going to be let go where you get a good severance. Take some time off, understand your mistake, and move on.

Packages are great when you can take a whole package then walk across the street and get a new job the day after. The main problem with this strategy is when the year is 2001 and every company in the tech-industry is going bust at the same time.

When I resigned from my last job, my last day coincided with a "reorg" that laid off maybe 3% of the workforce that very day (not a very big company though). I remember a coworker telling me, "Hey man, you should get in on that (so you can get severance)" :P

I appreciated his good natured humor :)

This same exact thing happened to me. Literally on my last day, first thing in the morning was a company wide meeting announcing a 10% layoff, my whole team included. Hard to imagine a more depressing last day. No severance for me, but at least I had a job to go to next.

That is a pretty big assumption that any of those "benefits" will be offered.

The other effect is whether you can handle the downturn in company morale. It is like smiling while the ship is sinking. It is not a good feeling.

Severance packages can be good, but you don't want to be the last to leave. I stayed at a company until the bitter end (Chap 11) and got almost no severance. I would have made more money in absolute terms if I had been sacked in the last round of layoffs. I thought I was skilled to avoid the layoffs but really it cost me money.

You want to be the second to last to leave.

I'm wondering: is it better to be one of the first to get sacked or the second to last?

It'd seem like the company would have more resources to "pay out" for the earlier rounds, gradually decreasing as the rounds go on. Besides, you probably want to get out of a failing company, and provided that you are competent (though increased competence would in reality lessen the chances of your getting sacked in the first round) I'd think that you'd prefer to get your severance and get out asap.

Heh. Yeah, that's an irony I've seen up close. The worst employees get the best severance, because the company still has money in the first round of layoffs.

My uncle was recently laid off and given severance of a year's salary ($150k). He got another $150k job soon after. He'll make $300k this year. This is in Missouri, where that's a lot of money.

That's great to hear and it's a wonderful turn of events, but I shudder thinking about the tax bill (though obviously you're coming out ahead no matter what)

There's nothing wrong with taking a job when you're desperate. It gives you breathing room to look for another job, and companies are more willing to bargain when you have a job.

The problem comes when you take a job because you're desperate and then stay because you're lazy.

Couldn't possibly be a better time to be laid off. Free money, severance package, AND the pick of the litter as to what job you want! Surely anyone who was hired at Zynga would be at least capable of most programming jobs in the country. The world is theirs.

That is, unless Mark Pincus decides to fuck them over. There's always that aspect. (see Tribe.net)

I googled around for a good 10 minutes and read a few TC articles and Pincus' wikipedia article and couldn't figure out what had happened regarding tribe.net (other than an issuing a TRO to a former colleague in 2009). Would you care to elaborate?

Just basically let it die even though there were paying customers. I remember people paying for premium service feeling pretty shitty when the people who ran Tribe couldn't even give a shit to keep the site up for more than a few hours. Tribe died right around the time Zynga's games like FarmVille exploded. It just seemed like he didn't really care about the people who made Tribe a good place to hang out and who kept the site going, and only cared about expanding his own personal portfolio with a game that most people frankly found annoying, especially those who didn't play it.

He didn't do anything all that shitty, but it was enough for me to recognize him as someone who doesn't care about the community-building aspect as much as the "making money" aspect. Because of that, when he does things like this, I don't feel all that surprised.

check this out, Pincus' profile: http://people.tribe.net/markpincus

i don't know but i'll bet it has something to do with Utah Street Networks.

Or it can be a great. Severance packages can be quite lucrative.

YMMV. I was part of a "10% workforce reduction", which included no severance packages. They gave us advanced notice, but I would have preferred the cash equivalent for that time instead.

I'm sure there's a rant about at will in there somewhere...

One of my favorite breweries (Strange Brewing Company - http://www.strangebrewingco.com/) essentially started on two severance packages from the Rocky Mountain News. Those guys definitely won when they lost their jobs.

The one sign for impending bankruptcy, sellout, or similar forms of doom: desperate last measures by top management to raise the stock price, presumably so they can make a last profit. E.g. SUNW changing its stock symbol to JAVA just before selling out to Oracle.

That was so classy. I remember when that happened and then I remembered that RIMM just changed to BBRY... Research in Motion to Blackberry... HMMMMM.

I'm just saying.

But Sun didn't change the company name to Java. RIM did change the company name to Blackberry. Slight difference.

interesting since companies like Salesforce have always had ticker symbols like $CRM

On the other hand, "Apple Computer" became "Apple" with apparently no adverse effects.

I think a comparable change on Apple's part would have been renaming themselves to MacBook with a stock symbol of $MBP (or something equally narrow, as opposed to dropping computer to go after a bigger market).

Imagine Apple with a stock symbol of IPOD.

$NEXT

LISA

Unfortunately SIRI is already taken!

My 1st thought was that the difference here is that Apple were broadening their focus, the other two examples were pinning all their hopes on a single product.

Apple was on the upswing when they did that though. It didn't feel like a warning sign.

While this is fair -- and I don't think there's a strong positive outlook on BlackBerry's future -- there were internal discussions for years about whether to change the name of the company or not since BlackBerry was really the only product and was far more recognizable externally than RIM.

True that. I've seen it happen before up close.

A long time ago I read an article about companies would actually use rumor and gossip to signal to it's employees that layoffs are pending without actually explicitly saying that. In theory you should be able to use signals to predict things.

In practice I've seen friends completely blindsided by layoffs and I've dodged many a bullet but still didn't see it coming for the other people. I think it can be real difficult to predict these things other than to use your gut if you think something's afoot and be prepared to act preemptively.

There's usually signs, if you're sufficiently attuned to see them. Another thread on HN a few days back led me to write a blog post about one reliable type of "warm up the résumé" indicator:

http://jasonlefkowitz.net/2013/05/introducing-lefkowitzs-law...

"... if you’re in a client-services business, when you visit your clients, make sure to go with them to grab a beverage from their break room before your meeting".

So true. Another good point is to ask to use the restrooms even if you don't really have to go.

I interviewed at one place where I was told over and over how well the company was doing and how the owner loved racing his Porsches at the local road track. Then I saw the restrooms, which looked like they hadn't been updated or fixed in twenty years. I figured out where the money was going... and it wasn't to employees.

Sure enough, the offer came in and it was a lowball. That confirmed my theory.

It's interesting that you mention the Porsche thing. I've always found looking in the company car park on the way into a job interview a pretty reliable measure of how a company is doing and in particular how it treats its staff. Seeing reserved spaces for senior management full of high end executive cars and SUVs, and then a handful of unreserved spaces for everyone else full of much older vehicles without a single high-end or enthusiast model is not a good sign.

Or, even worse, a row of empty spots reserved for senior management...

Keep in mind that restrooms are often the one part of an office that a company can't upgrade because they're under the control of the landlord and not the tenant. I've worked at a number of companies where we were doing fine, but the bathrooms were terrible because the landlord never, ever updated them from the original build.

That is what the bad companies will always say, even when it is not true.

Landlords will happily allow the tenant to pay the cost of renovating the bathroom. Good companies understand that certain basic creature comforts for employees are a cost of doing business, and it is very little money in the long haul. Penny-pinching here is a bad sign (unless it is a very early start up, or the company anticipates moving offices within a couple years for some reason).

I guess I could have added this to the original story, but the company owned and built the building themselves. In the late 70s. And the interior apparently hasn't changed since.

The company can move offices. His point is correct.

Not only food, but office supplies. Very true.

But it's important that the Variation is indicative. Like if you get baller snacks for a year and lame snacks start coming in, that's a very bad sign. But if you've always had lame snacks that's not a bad sign, your company is just frugal.

At Kaleida, the upper management stopped showing up for work all at once, because they were under non-disclosure not to say anything about the impending layoff, and didn't want to encounter anybody in the hallway who wanted to chat.

Oh Kaleida... I must have been the one person anywhere who liked ScriptX.

I liked it! It lives on in MaxScript, the extension language for 3D Studio Max, written by John Wainwright, one of the architects of ScriptX.

Here's something I wrote about MaxScript: Automating The Sims Character Animation Pipeline with MaxScript http://www.donhopkins.com/drupal/node/30

If management can use the rumor mill to convince people to leave for new jobs before a layoff, then the company doesn't need to pay as much severance.

Internally, a big leading indicator is usually a constant series of reorgs. Reorgs goeth before the layoffs.

Last-ditch attempts to shuffle the deck chairs usually mean that shit's about to hit the fan. These are usually coupled with the secrecy/fiefdom mentality you mention.

There are only two types of employees in a reorg: those doing the reorganizing, and those being reorganized. If you're frequently among the latter, know that you're also considered expendable enough in a layoff scenario. If your company's gone through several reorgs in rapid succession (more than 2 in a 6-month period, say), it's probably not a bad idea to start planning accordingly.

There are many companies that do reorgs regularly each year as kind of a habitual "churn" process. Do you think this is indicative of anything, or is it just case by case in this case?

Without knowing more about the specific company you are referring to, it's hard to tell, but I would propose that in _most_ situations, it's indicative of a systemic problem.

I'm talking less about planned or regular reorgs. Talking more about multiple reorgs over a shorter-than-usual timeframe. Yearly reorg as a matter of course? Probably nothing to worry about. Two reorgs in the same quarter? Red flag.

I was involved downsize a couple years back, and it turned out well for me. At least with my company they gave a severance package at departure. Better deal then just leaving for a new job.

If you can, negotiate your new job just before the layoff. Then stay around for the severance package. I was lucky enough to have done that when Kaleida shut down, so I didn't have to compete with everybody else I was working with for a new job in the same field at the same time. (A bunch of them went to Netscape, and I'm sure glad I avoided that trap!)

You have more leverage finding a new and better job while employed. Be on severance is a huge disadvantage.

Not for engineers though. There will be multiple offers in the case of Zynga engineers, so negotiating isn't the issue. It's better financially to get severance.

Deleted comment

This is nonsensical. What exactly did Zynga do that was so bad? They are still making hundreds of millions of dollars per quarter. That's something most companies will never do. It's not like they committed fraud or anything illegal.

As well, regardless of what you think of Zynga's games or their business strategy, the engineers have really great skills in dealing with some very great technology and high-load situations. They will be extremely marketable.

To paint every single employee with the same paintbrush just because their business isn't something you particularly enjoy is dumb.

They still have how many years left on that lease on that building? Six years still? Ruh-roh, Raggy.

The building isn't leased - they bought it for cash a year or so ago.

That's unfair on the employees. Sure, Zynga has a reputation as a scummy company with low morals, but I don't think it has a bad technical reputation. And the day-to-day programmers, architects and designers won't have had much influence on the behaviour of the company. I don't think they'll be tarnished, and it would be dumb for a potential employer to reject them just because they worked there.

Right, imagine a hypothetical employee whose job it was to make tobacco more addictive. "But the company doesn't have a bad chemical reputation..."

EDIT: Downvoters, do you really not think that a person's personal ethics can be judged from the work they choose to do?

Sometimes you can certainly judge a person's personal ethics based on the work they choose to do.

But silly mobile games using a business model SV geeks don't like? No. In the grand scheme of things Zynga is trivial and harmless.

In the 90s when boo.com imploded (you might not remember them but they were huge) my company wanted to hire some of them. I prevailed against it then. Boo collapsed because they partied their way through their investor's money. Regardless of any other skills, they all had a spectactularly poor attitude to other people's money. You don't want that kind of culture to take root in an organization.

That looks narrow-minded for those particular employers though. The leadership might have made a lot of questionable decisions, but I don't think that should affect the quality of the engineers from that company.

That doesn't make sense, just because a company has a history of making bad management and product decisions doesn't mean the engineering talent is subpar.

Very few engineering managers are in the position to have significant no-hire piles these days.

> ...games isn't an operations business, it's a hits business.

It depends on the game. Low-engagement games like Zynga titles are definitely hits businesses. However, game companies are starting to figure out that hits aren't sustainable. You have to create lifestyles that make people say, "I'm a X game player," not just "I play X game," and that means exceptional, reliable game experiences that extend outside the game. Creating a great Games as a Service company REQUIRES really awesome operational expertise. Game studios and publishers that want to provide those kinds of experiences really do need to have solid operations, and not just in their technology. The entire experience, from their support to their online presence to their in-person events, has to be buttoned up tight.

>...* that means exceptional, reliable game experiences that extend outside the game.*

This is something Zynga has never, will never understand. They don't have a deep understanding of games - they have a deep understanding of rapid ~~~thievery~~~ emulation and deployment.

"..Zynga can't make wins because they're too cluttered with layers of middle management FUD."

Right on.

Let me add another 2 warning signs:

- The free food/snacks get cancelled.

- The "untracked" WFH days suddenly come under scrutiny.

- The free food/snacks get cancelled.

Relevant recent discussion: The Elves Leave Middle Earth – Sodas Are No Longer Free (2009)

https://news.ycombinator.com/item?id=5751329

More relevant than you might think...

In defense of the Google chef (2011)

https://news.ycombinator.com/item?id=3223595

http://blog.rongarret.info/2011/11/in-defense-of-google-chef...

Ah yes I remember this post (and many ex-Googlers coming to his defense)

Ironic that his restaurant is only so-so wrt bang for the buck.

Also, requests for detailed written documentation of some software/process/whatever that only you are intimately familiar with.

As soon as I got this, I was properly braced for the forthcoming downsize (at a company I worked for years ago).

The "untracked" WFH days suddenly come under scrutiny.

This can also be an indicator of rampant abuse. That is, too many people work at home and don't work much. In my experience, even in small companies, there's a lot of me-too-ism with WFH, which leads to people asking for and being approved to work at home, when they really shouldn't be. Over time, this can lead to a measurable drop in productivity.

I wonder which is a better approach: an unilateral barring of WFH days, or an effort to improve team morale to the point where people actually want to come to work.

Yahoo is unilaterally cancelling all work at home plans, but my friend's manager was organically trying to get his team to come in on the WFH Fridays with Friday team events centered around alcohol, and other ways to build camraderie and morale.

Ah, point taken... but this may be a chicken-or-egg problem. If things are such in a company that a significant group of people start abusing WFH, that seems to imply morale has somehow been damaged and people aren't excited about their work(anymore?). Is WFH-abuse causing low morale/productivity at work, or did something else cause the decline in morale/productivity thus resulting in WFH-abuse.... I dunno.

> Zynga likes to pretend that their Z-Cloud gives them an advantage over their competitors.

I wonder what would happen if they try to find a way to sell that as a service?

They'd turn into a ghetto-AWS.

Clouds with Friends!

"We've made great strides in adding social networking features to your service's downtime!"

Good feedback. From friends at Zynga, they saw it coming.

What does "FUD" mean in this context?

Fear - uncertainty - doubt. Basically when people kill good ideas by focusing on only the bad aspects and risks. It can happen when people are too conservative and want to keep the status quo, or aggressively to undermine competing interests.

Probably "cruft".

Bashing z-cloud is unwarranted and irrelevant to the point you make. A piece of technology that saves a company millions of dollars has no place in your diatribe against its management or creative output.

Keep your LinkedIn network up to date can be extremely helpful too :)

I feel bad for those who put their blood, sweat and tears into building Zynga.

I feel bad for those who have just lost their jobs.

I feel bad for those who remain under a cloud with the only comment they get is self-deflecting language from their CEO like "brothers and sisters".

Who I don't feel bad for is Mark Pincus. The collapse of Zynga couldn't happen to a more deserving person. Just 18 months ago when Zynga was on top of the world, Pincus made a name for himself by bullying staff to give back stock options [1] for no other reason than he thought they didn't deserve such a huge windfall.

Well those chickens have come home to roost. Those same employers will be the first to take flight having no further loyalty to the company.

I also know that I wouldn't work for Pincus. He's shown his true character with this petty greed (how much difference did this make to him personally really?).

Frankly I'd hesitate in working for any company backed by the same VCs that let this happen. To allow this erosion of what I'd call the "startup bargain" (trading salary for equity) by greatly reducing the upside is shortsighted and undermines the very conditions that makes the startup scene thrive and succeed.

As much as I viewed Groupon as a scam (a Ponzi scheme essentially), Andrew Mason's parting words [2] after getting fired gained him a lot of respect (from me at least) as they were authentic and didn't seek to cast blame elsewhere. In fact he went so far as to make a joke of "spending more time with my family" (which we all know is a euphemism for getting fired).

What entrepreneurs and VCs need to realize is these bullying tactics (and I include the underhanded clawback agreements to Skype employees in this) undermine the entire ecosystem and we need to send a powerful message that they can't and won't be tolerated.

[1]: http://usatoday30.usatoday.com/tech/news/story/2011-11-10/zy...

[2]: http://thenextweb.com/insider/2013/02/28/andrew-mason-groupo...

I really don't feel sorry for anyone who work(s)(ed) for Zynga. This company milked the whole "social gaming" bubble for every drop it was worth. Every game they made was a clone of this or that, and they used every spam trick in the book to get more clicks, and every single employee at that company knew 100% full well that they were part of a modern day ponzi scheme that would blow up once Facebook become uncool.

This is so incredibly wrong in so many ways. Many developers were seduced into social games because people loved them and it seemed like a new frontier and a new market with shorter development cycles and interesting challenges. It is easy to have great hindsight but a few years ago the game industry looked very different. Zynga has had a few games be reviewed quite well, but nobody ever seems to remember them.[1][2]

As a former Zynga employee that came in through acquisition, I find it repulsive that people assume we are all responsible for the poor decisions of a few at the top. Most of us worked our asses off to try to make something awesome, but ended up having to compromise in the worst possible ways to satisfy the top brass or poorly understood metrics.

[1] http://techcrunch.com/2011/05/31/zynga-channels-settlers-of-... [2] http://kotaku.com/5836588/adventure-world-is-zyngas-take-on-...

It's easy to say 'Oh sure, I work for the Evil Empire, but my division makes interesting things which people actually quite like...'

...but then you've got to be prepared to take it on the chin when someone says, "Yes, but that whole company is Evil, which, kind of by association includes you."

When you work for someone, their reputation does, absolutely, 100% reflect on you personally regardless of what your role in the company is (to some degree, obviously).

Just food for thought.

If you don't like it, don't work for people you don't want your personal reputation associated with.

When you work for someone, their reputation does, absolutely, 100% reflect on you personally regardless of what your role in the company is (to some degree, obviously).

I don't understand this rationale at all. You are not your company. Calling someone evil because you dislike their company (I'm not defending Zynga, but they're the #firstworldproblems of "evil") is incredibly sophomoric.

You've basically got a very mild variation on the Wernher Von Braun thing going on here.

Engineer of prolific impact and talent, working for the worst possible people, indirectly exploiting people in the worse possible way to do shit work that is related to his pure and commendable goals and interests. The engineer feels as though he is powerless to resist the the exploitation that is demanded by his employer. Eventually the bad guy employers go down in flames to everyone's delight, but the engineer still has the technical chops to make himself valued.

The question, does the previous employer reflect poorly on the engineer?

To be honest, Von Braun is one of those ambiguous figures in history for me. I don't really know how I feel about him. However, the fact that he is ambiguous at all means that I have to admit to myself that his affiliations during the war do tarnish what I think of him. I don't think it is possible for that not to be the case.

Ex-Zynga software engineer? Obviously the ambiguity is not going to be "is this guy a war criminal or not?" But would there be any ambiguity of any sort? Yeah, I think for me there would be.

I don't think an engineer of any caliber is evaluated in a vacuum, past employers shape how we view them, for better or worse. This (particularly how I feel about Von Braun) is something I have thought about hard in the past when considering what I want to do as an engineer.

I know Mark Pincus is a pretty big dick, but "worst possible people"? Come on.

> very mild variation

In case your browser isn't showing it (android chrome?), there is some italicized emphasis there.

com·pa·ny noun:
a : association with another
b : companions, associates
c : a group of persons or things
d : a chartered commercial organization or medieval trade guild

e : an association of persons for carrying on a commercial or industrial enterprise

You are your company. That's the very definition of the word. One might be given a dispensation to the evil-by-association if you were working at Burger King because that's the only job you could get.

But you're presumably an incredibly smart and capable (and thus sought after) tech professional who could no doubt have placed his labor wherever he chose.

To be honest, "company" is an association of shareholders. I don't think this definition covers or should cover employees.

Agree with your overall point though.

If you are the company, but the company is not you (assuming other employees and shareholders), but the company is a person itself, does this mean that you and the company are conjoined siblings?

I totally understand. Most major "evils" happen through a combination of very small steps towards the cliff. It takes a very vigilant stance, permeated through the company structure to prevent this fall into the abyss. In this light, constantly questioning the ethics of your employer company, as a whole, is healthy.

Perhaps. ...but I think you're fooling yourself if you think this doesn't happen in the real world.

There's something so particularly American about gaining so much of your identity from your job. American's are so defined by what work they do.

I am not my employer. My employer pays my wage and that's it. I'm not interested in joining a cult. I'm earning a paycheck.

This is not to say I would feel comfortable working for a company like Zynga. Absolutely not. But I also don't doubt there are many people at Zynga who really do not like the company's direction. Don't blame the soldiers for the fault of the generals.

It's not about your employer being your identity; It's about empathy and whether your choices improve or worsen others' lives.

> Don't blame the soldiers for the fault of the generals.

Since you apparently like military analogies, I'll quote one of the Nuremberg Principles, which---as far as I am aware---are not an American invention:

"The fact that a person acted pursuant to order of his Government or of a superior does not relieve him from responsibility under international law, provided a moral choice was in fact possible to him."

This is a pretty sensible principle, because it's the soldiers who enable the generals. Similarly, if you're a developer (unless you're really terrible) and you work at Zynga or any other company, you're enabling your employer.

You are misinterpreting the Nuremberg Principles: They didn't charge the rank and file of the German army for the crimes committed by the various officers and SS members.

All that was decided at Nuremberg was that if you have committed a crime, the fact that you have been ordered to by your superiors does not innocent you.

So we agree that anyone who did the spammy deeds at Zynga is "evil", whether their boss asked them to or not. But that does not make everyone else in the company (from the backend developer to the cantine lady) evil.

Zynga may have lost all it's glamour and has a bad reputation now but the same goes for Facebook. I don't think employees should be blamed for the decisions of their heads.

In no way, should this be regarded like military service where your job causes fatalities. For me, as long as you're doing something you enjoy with people you like and developing a skill set, that's reason enough to work at a company. Some people work at jobs they hate all their lives because they need to live and support their families. If you have a career where you can work with smart people and do what you like, you're already pretty lucky.

If the company does something you believe in, wow. You're really lucky. How many people get to do that in the world?

I don't think that's American at all. In all modern societies we first define an individual as which company he works for.

Picture yourself meeting new people. The first question to eventually come up will be "So, where do you work?"

That's so true. In the Eastern philosophy, your work is one part of you, may be a big one, but just a part of you. Your inner being, inner peace is of greater importance. Your friends, family and love matters.

As we can see in Japan because no true Japanese person lets their work take away from their family life.

We can also see this in Foxconn assembly lines, the home of the work/life balance in China.

Judge: Did you shoot the peasants?

Soldier: Yes I did, but I was following orders.

Judge: But, you could have avoided shooting the peasant, right? But you didn't.

Soldier: Yes I could, but I was following orders.

I hear what you are saying but it is NOT simply hindsight. Many of us from the beginning were very critical of sort of games developed by Zynga, it is definitely not a case of looking back. This is not to say that all the developers were there to rip off previous games and create digital crack but Zynga is what it is and we did say it from the beginning.

Those compromises helped this story get written:

http://www.sfgate.com/news/slideshow/Mark-Pincus-039-16M-Pac...

>they were part of a modern day ponzi scheme that would blow up once Facebook become uncool.

but isn't this like 80% of silicon valley, at this point? I mean even google is now trying to become facebook; and the rest of us are just trying to get acquired by one of the giants, or trying to sell something to the Engineers who are in one of those groups.

I mean, seriously, glass houses; be careful with them rocks.

What? Even assuming that Google is trying to become Facebook and that everyone is "trying to get acquired", why do those situations preclude trying to create something that you believe has actual value (vs the complete, blatant ripoffs and spammy crap that Zynga pushes). You're free to disagree that Zynga's games _are_ spammy ripoffs, but you didn't seem to take issue with that part of the parent comment's post, and saying that the rest of the Valley is engaged in the same behavior is downright silly.

>Even assuming that Google is trying to become Facebook and that everyone is "trying to get acquired", why do those situations preclude trying to create something that you believe has actual value[?]

well, assuming you honestly believe that facebook creates enough real value to justify it's valuation, sure, you are right. My take on the matter is that it's myspace 2.0. I mean, no question, it's worth something, but not nearly what it's valued at right now. I personally have a very difficult time believing that anyone who was working in the industry during the first dot-com can honestly believe that facebook is a sustainable business.

The only people I know who honestly espouse the view that facebook is fairly valued are facebook employees. (Interestingly, I know no facebook employees who were working during the first dot com.)

I mean, maybe these people all really believe exactly what their paymasters want them to believe? Personally, I find that thought far more creepy than the idea that they are just faking it because that's what the employer requires. Certainly there is some selection effect; you are more likely to apply for a facebook job if you believe the company is going somewhere? but it's weird. I remember one guy who is probably the staunchest facebook advocate I know now, he was extremely cynical about facebook before he got the job. Of course, he's also pretty young, too young to have worked through the first dot-com.

The weird thing is that I know a bunch of people who work for defense contractors, too... a place where you'd expect a certain level of brainwashing. None of those people believe their companies are doing good things for the world. Not one. I mean, they generally think the work is really interesting, but they don't believe at all in the end goals. (and I do have some conservative friends... it's just that none of them work for defense contractors.)

But then, what do I know? I find that what I consider to be 'spammy crap' is a pretty good heuristic for what most people want. I don't use facebook because it consists almost entirely of what I would call spammy crap. Spammy crap and baby pictures.

I think this as a terrible way to look at people and the world. People need jobs to provide for themselves and their family. Social gaming isn't a "ponzi scheme" -- you can think its a waste of time, you can think Zynga's corporate policies were bad, but at the end of the day a bunch of people who just wanted to make money building things just lost their jobs.

I'm not so sure they deserve the sympathy though. Nearly every game released for the past several years has been a literal clone of another game- usually so wholesale, so completely devoid of any innovation or new content, that it was indistinguishable to the lay man.

When you're literally being told to copy another company to create your product, so brashly? You honestly deserve what's coming to you. I'm okay if you try to innovate at least a little, but they never did. They just used their platform and size to bully smaller companies(and sometimes, stupidly, larger companies like EA) into irrelevance.

I'm tempted to agree with you. "They're just trying to support their family" can only be an acceptable excuse up to a point. I don't know if Zynga reached that point or not. I just think it's important to keep in mind that you can only do so much evil before "providing for your family" is no longer a valid excuse.

Of course, this all sounds ridiculous in comparison to "real" evil, like mass murder. So I'm also tempted to disagree ;).

> People need jobs to provide for themselves and their family.

No, these people were seduced by promises of a big payday for copying other people's work -- plain and simple. There are so many tech and gaming companies to work for in Silicon Valley that I just don't believe it's possible to pick the most egregious one simply by accident.

Zynga has poached a lot of talent from the real game industry. People don't need to resign and join Zynga - it's a choice they've made. And with the requirements Zynga had - even if you had been unemployed and got an offer from Zynga you could get another one everywhere else: they had not been exactly scrapping the bottom of the barrel, quite the opposite.

I'm curious as to how were they able to poach. Money, equity, working conditions, all of these, none of these...?

Working conditions in some of the big companies in the real games industry sound pretty bad to me, but I am only going on lazy reading of articles like "EA spouse", I have no experience in the industry itself. I think I'd be pretty outraged to be on a Farmville death march, for sure.

I'd guess equity and money. Zynga does not seem to have conditions different from EA (not surprisingly as it's managed by the same people) and EA is not really able to poach somebody with its working conditions.

> People need jobs to provide for themselves and their family.

That may apply to the administrative staff, or people in sales and marketing. Maybe even managers.

But not to the developers that had options and chose money over ethics. It doesn't make them "evil", but it puts them very low on the list of people to feel sorry for.

>Who I don't feel bad for is Mark Pincus. The collapse of Zynga couldn't happen to a more deserving person. Just 18 months ago when Zynga was on top of the world, Pincus made a name for himself by bullying staff to give back stock options [1] for no other reason than he thought they didn't deserve such a huge windfall.

That was my first thought. Couldn't happen to a nicer guy.

"Frankly I'd hesitate in working for any company backed by the same VCs that let this happen."

I see some pretty big names in the list of Zynga investors. Namely Union Square Ventures, Andreessen Horowitz, and Kleiner Perkins Caufield Byers. The set of startups these VCs have invested in will cover a huge portion of the "good" startups to work for.

I don't know if refusing to work for a company backed by one of them is a viable option.

> I don't know if refusing to work for a company backed by one of them is a viable option.

There is a bigger world out there than you think.

Google invested on Zynga, and Cletus work for Google. Sorry for being cynic, it's not my style.

Why do you assume Google is so good? Or so unavoidable?

Recently Google bought Quickoffice and booted two offices of android devs + QA in Ukraine without even paying them 2-month equivalent of salary for the inconvenience. Not sure if they are going to sue.

You can argue it was not "The Google" but some of their proxies, but it doesn't matter: as a company they're cool with that, saving some dimes by ripping out employees they aren't going to use, when they can get away with that.

See https://news.ycombinator.com/item?id=5817073

So what? I didn't doubt Google invested; I just claim it's not as important because Google isn't actually good when it comes to treating 3rd party employees.

You didn't read the whole thread. The thread was initiated by someone who works at Google, and says ""Frankly I'd hesitate in working for any company backed by the same VCs that let this happen.".

It wasn't obvious from the context that he works for Google.

And it seems he actually works for Twilio: https://news.ycombinator.com/user?id=stanleydrew

But I would say "core Google" is safe, it's just that Google investements/acquirement doesn't really mean any safety per se.

Again you are not reading what I say. The user is https://news.ycombinator.com/user?id=cletus

I'm the last person to defend Zynga and it's practices but I agree this needs caution.

If the boot is on the other foot, and VC's are expected to own such a degree of responsibility to maintain their reputation, then as a founder suddenly I'm going to be dictated by my investors as to how to run lower level aspects of my business that would not normally need board (thus investor) approval.

If we want investors to remain hands-off outside of board decisions then you can't expect them to take responsibility for aspects they have no control over.

> I don't know if refusing to work for a company backed by one of them is a viable option.

people can get rich selling socks. you don't need to work for these companies.

Not exactly that, but Google invested on Zynga.

Interesting, but needs a bit more context - when and how much?

Here's two bits:

http://techcrunch.com/2010/07/10/google-secretly-invested-10...

http://allthingsd.com/20110718/zynga-updates-ipo-filing-to-l...

The solution to prevent clawback of stock options is better employee rights law.

A good reminder to not get stuck in local fad maximums.

Remember when the future of every single company was gamification or bust? Remember when the seemingly only viable business model was skinner boxing rube middle america housewives with no self control (oddly, middle eastern princes also would spend tens of thousands a month on those silly in app purchase games, except they can afford it and don't have their lives ruined with addict-induced credit card debt)?

I don't have a point. Just notice how the "tech press" and fads and media sweeps through in its ever-shortening attention span to the point where they aren't good signals for anything anymore.

Empty, derivative Facebook games are not any more "skinner box" than anything else we either enjoy or do out of necessity. Almost any game ever created could be described as a "skinner box." Completing work units for a salary could be described as a "skinner box." If there is something especially bad or manipulative about Facebook games, it isn't that they are a "skinner box."

Perhaps you're unaware that Zynga explicitly treats games like skinner boxes? Their whole deal was using metrics to manipulate the feedback loop to maximize profit.

Even the most mainstream traditional games were designed to be fun -- they might aim for the lowest common denominator, they may artificially inflate the game length, but the goal was still entertainment. Because all they wanted you to do was buy the game.

That's not the case with the microtransaction free-to-play model -- they need you to not just play the game, but to feel a need to play the game. That means their goal is getting you addicted to the skinner box. The mechanics of such a game are all built to reinforce this goal. Zynga took this to its logical conclusion by A/B testing the various game parameters.

As Tim Rogers said, such games are "a love letter from a computer virus."

http://www.actionbutton.net/?p=1076

(Warning: long but insightful article (But if you recognize the author's name you'd already know that.))

>That's not the case with the microtransaction free-to-play model -- they need you to play the game, to feel a need to play the game.

Zynga focuses on mechanics that promote habits, but to say that's the only approach incentivized by F2P is a pretty myopic view of the market.

The F2P model incentivizes addictive gameplay more than other genres, but it's not like building an addicted game was a bad thing pre-F2P. Valve's DOTA 2, for instance, has largely identical gameplay to its 100% free Warcraft 3-based ancestor (tangentially, Team Fortress 2 isn't much of a skinner box either).

> That's not the case with the microtransaction free-to-play model -- they need you to not just play the game, but to feel a need to play the game.

This is actually more true for subscriptions than for F2P. With F2P they need you to have a reason to actively buy things. With subscription, they need you to play enough to find the next month worth paying for.

Whereas one-time box sales the way you're talking about is all about getting you to make the purchase at all.

No, they very much are a skinner box. Read any good tutorial or paper in the field (say, http://www.fdg2013.org/program/papers/paper06_zagal_etal.pdf ). The revenue model depends on base applied behaviorialism.

And indeed, that's why they've hired at least one behavioral psychologist. (http://www.time.com/time/magazine/article/0,9171,1940668,00....)

Hm. I'm not talking scientifically here or anything, but I've always felt the lack of any kind of depth in most Zynga games makes them feel very skinner box with little pretense beyond that. Most games have complicated stories or game play mechanics. Many Zynga games seem to be "Fill up these three bars by clicking these buttons. Watch them fill. It feels good doesn't it."

Personally I couldn't say that about many other games/work.

Chess isn't a skinner box, neither is Solitaire or Skyrim. Even poker is less of a skinner box than the games we're talking about.

> A good reminder to not get stuck in local fad maximums.

That's a good goal - but how do you know in advance whether it's a fad (like Zynga) or the real deal (like Facebook)?

Using facebook as an example of the "real deal" may be a mistake. A better example might be Intel.

Right on. Facebook is the opposite of a correct example here.

You can just ask me. I've been telling people that Zynga was a dangerous fad that's not worth chasing for years.

I think it's less about it being a fad and more about it passing the ethical sniff test. If you end up working for an unethical company, a small error can blow up into a crisis because you were already dancing the line.

When I look at my Facebook news feed, my relatives who don't have a lot of money to throw around use Facebook to post baby photos and talk to their friends. They use Zynga to spend their (little) money on virtual cows/rows in a relational database. Both of these are mindless ways to pass the time, but only one of these should obviously raise red flags as something you should not want to be associated with.

"business model was skinner boxing rube middle america housewives with no self control"

That quote made my day. HAve you been reading Gibson or Stross novels lately? :)

I have only passively been paying attention to Zynga. I do feel bad for people who are now out of work. However, the staggering thing about this article to me was that 520 people only represents 18 percent of their employees. That means that after this, there's an astonishing 2300+ people still working on Farmville and friends. Coming from a nonprofit biomedical research group where I struggle to get single digit numbers of developers, that is mind-bending.

Hey JunkDNA, I was hoping to learn a little more about what you do and your field. I'm going to be graduating soon with a bachelors degree in biochemistry, and I would consider myself a fairly competent developer, so I'm looking to start doing some real scientific work soon beyond just vanilla software development. From your standpoint, what does the biomedical landscape look like and what kinds of things would developers be focused on?

My email is pvnick@gmail.com if you'd like to talk. I look forward to hearing from you :)

Funny because I have in the past applied for jobs in such companies, but I never got an answer, and now I work for a company similar to Zynga.

your nonprof biomedical group didnt have kleiner perkins pushing it towards an ipo ;)

Ah, but the IPO already happened so it's time to lay them off.

> "The reason? Mobile"

I don't buy this at all, nor do I believe that this is a

It seems like everyone blames everything on either the economy or a shift to mobile these days. Intel, Microsoft, EA, and now Zynga. All of this despite the fact that dekstop traffic has remained steady or grown, even in the last two years. Yes, more people are accessing the web via mobile, but it's still only 15%. [1]

Do you see Activision-Blizzard and Steam talking about how mobile is stealing their lunch? Nah, they're too busy eating Zynga and EA's lunches.

I have yet to see any data showing that EA or Zynga are shrinking based on forces beyond their control. I bet the guys on /r/gaming - annoying though they can be - could give you a better idea than journalists who buy the PR lines. This isn't some totally-unforeseen and cataclysmic surge to mobile.

We're talking about a company with a reputation for churning out unoriginal copies of smaller/indie games. THAT is their problem. If Zynga wants to grown, they must focus on original and high-quality games. Costs and risks are much higher, but that's what people are willing to pay real money for.

[1] http://searchengineland.com/report-mobile-traffic-to-local-s...

It's really casual gaming that's suffering from this: folks are switching from playing those types of games on Facebook to playing them on their phones.

Sorry, I meant to add, "nor do I believe they haven't seen mobile games coming."

Boy does this suck for Zynga employees. I really feel for the former OMGPOP employees as well- looks like Zynga has taken them down with them. I know that OMGPOP were desperately short of cash themselves, but at least they were the masters of their own destinies.

EDIT: and I wouldn't be too smug about their downfall if I were you. There could be repercussions across the tech sector if Zynga totally fails.

Why? I felt bad for Zynga employees who got screwed earlier since that was the first breach of trust by their CEO and it was still unclear if Zynga was something other than a game-copying exploiter of economically disadvantaged people through game mechanic trickery. But now, after all the dirty laundry has been aired?

edit: Any repercussions for the tech sector if Zynga fails will fall in the "healthy correction" column in my book.

I would assume that he is referring to the possibility of a confidence crash in tech companies that would affect public markets. Personally, I don't think Zynga is widely held enough for it to have much of an impact, and as you mentioned, the dirty laundry has already been aired.

I agree. If somehow Facebook plummeted and bankrupted it would absolutely raise doubts about the tech sector. 1/7 of the world can't use a service it trusts any more is a big deal.

Yeah, I think Zynga failing would have to be coupled with at least a few other non-social-gaming related companies for there to be any market-wide implications due to capital shifting.

edit: honestly if you are worried about market-wide implications wrt ZNGA the stock, if they ousted Pincus and started fixing the company then the short squeeze and the subsequent margin calls would probably be more of concern than the stock cratering, which is what most people expect.

The OMGPOP purchase was for a ridiculous amount; I think they were fairly compensated.

good repercussions, so bring them on.

The gaming industry is so fucked. On one hand, you've got huge conglomerates like EA that release shitty game after shitty game with invasive DRM that would make Orwell cringe, and on the other you've got 2300+ people working on Farmville. I just feel bad for indie developers that release progressive and inventive games competition after competition with tiny teams of 1-2 and live on shoestring/student budgets.

Steam Greenlight ended up being more of a failure than a success, next-gen consoles won't even give a shit about indies, and we wonder why this industry is so screwed up. Don't even get me started on the lack of proper infrastructure for competitive games, etc (at least in the West). The whole thing is just depressing.

There's never been a better time to be an indie developer, particularly on the PC. Marketing remains difficult, but now there are virtually no barriers. Digital distribution and engines like Unity have changed everything.

Steam has its problems, and I wish they'd just shift to an Apple-style app store model with a curated storefront. But in general, they've been a huge boon to independent developers.

>I wish they'd just shift to an Apple-style app store model

If they lowered the minimum prices too, I wouldn't mind. But right now Steam has a lot of third-rate "side-project" games that are lower quality than free flash games online charging the price of a very good iOS/Android game and it's getting annoying.

Now, I'm not one to think saturation with lower quality/more indie stuff is always bad (especially with music, for example) but it seems with the ubiquity of PC game development as a hobby, a decent amount of crap is a byproduct.

Zynga's fatal flaw was depending on a platform that they don't control (Facebook) in order to make money. Twitter third-party developers got burned by this not that long ago in the past.

next-gen consoles won't even give a shit about indies

Indies were given a disproportionate amount of attention at the PlayStation4 reveal.

Supercell, a small studio with just 2 games, has higher revenue in the app store than all of EA's 900+ mobile games combined.

The mobile games market is still young.

That's why I'm excited about OUYA. Our whole goal is to reduce the barriers between developers and gamers.

Disclaimer: I work for OUYA.

> The move today will affect every part of the San Francisco social gaming company . . .

Zynga is a gaming company? That's news to me -- I thought they were still in the business of tricking people into paying for the privilege to click things faster.

Is it any surprise that wasn't enough to sustain a company?

It's unfortunate such an ethical CEO as Mark Pincus has to go through troubles such as this.

This is also a reminder that only very few companies caught up in the bubble have real business models that will last when the bubble pops.

Yes, I was being sarcastic. Sorry, I thought everyone knew what a douche Pincus was: (and this is just ONE example):

http://techcrunch.com/2009/10/31/scamville-the-social-gaming...

Sidenote: Does HN stop editing after a certain timeframe? I can't find a link to edit my original comment to add this.

> Sidenote: Does HN stop editing after a certain timeframe? I can't find a link to edit my original comment to add this.

Yup. The time frame is ~15 minutes, AFAICT. Same with deleting, though I think that's about an hour. Don't quote me on those numbers.

If you read the comment above: https://news.ycombinator.com/item?id=5815128

You have to wonder how ethical he really is?

I'm sure he was being sarcastic

You are probably right but for some reason I guess I missed the sarcasm. I haven't followed Mark Pincus so I wasn't sure and this isn't reddit so I guess I'm just used to people being more sincere.

Normally, I would definitely be serious and more technical. However, the fact that Pincus is one of the biggest scammers out there and people still: 1) Believe him 2) Invest in his companies 3) Work for him, leads me to be a little sarcastic. It's hard in this day and age with information overload to see people still getting involved in pyramid schemes and wanting to buy snake oil.

This is sarcasm...right?

The takeaway here, for me at least, is that Zynga got a lot of early success via a couple smart exploits-- early social network virality (since shut down by Facebook et al. because spammy Farmville requests hurt user experience) and freemium gaming (which has been embraced by the rest of the competition and no longer serves as a competitive advantage). So Zynga now has to be just another gaming company, and gaming, as an industry, is high-overhead and high-risk, with a lot of very serious competition. There's no hockey stick in running a big gaming conglomerate; it's just a media business. If you have a hit, you make money for a while, if you don't, you lose. Just like running a record label or a movie studio.

> restructure its troubled business toward mobile

How can you found a company in 2007, go public in 2011, and not be prepared for mobile in 2013? You take all that cash from public markets but fail to have a mobile strategy while hiring 3000 people? That's a colossal management failure. The board should rid the shareholders of him. Also, where the eff _was_ the board? You'd think someone would have just held up their iphone in a meeting and it would have been enough.

Because no one is really prepared for mobile, even now. The problem isn't that no one saw the rise of mobile coming, but rather that no one really knows what to do about it in response. Most people still don't.

This is particularly true for advertising-based companies. Mobile users are less engaged to your ads, have less intent, and are more loathe to tap on ads, so even if you can maintain the dominance of your product into the mobile space you're still looking at a bad revenue situation.

Mobile is here now, in full force, but revenue on mobile platforms is still largely an unanswered question. We started out selling apps, then we started down microtransactions, and ads, but none of these are particularly great.

So I guess what you're saying is that zynga staffed as if mobile was going to be as profitable as online but it turned out that it was an entirely different beast. They scrambled to adjust, but nothing worked. Too many people; time for tough love. Fair enough. The overstaffing may still be excessive -- the reaction delayed, hard to tell -- but I can easily imagine swinging for a land grab and ending up surprised in the dirt. Thanks for explaining. I guess I'd make a crappy board member :)

I have accidentally clicked on mobile ads at least 100x more often than normal ads. This is actually really dangerous to the industry, because it artificially inflates revenue. When advertisers figure it out, the money will disappear.

With respect to employees that have lost their jobs. Good, fuck Zynga.

The public announcement: http://blog.zynga.com/2013/06/03/ceo-update-4/

    "Our Founder and CEO Mark Pincus today sent a note to employees
     outlining structural changes..."

It might seem like a small thing to some, but I can't believe the casual language on the blog post introduction. The CEO "sent a note" to his company?

I'm sure that softened the blow to those 520 people. It was just a note, after all.

I don't care what your culture is like or that you want to be a "cool" company. Notes are for reminding people to clear their old food from the fridge, or seeing if anyone wants to get together after work to welcome the new guy. This is serious shit to (hopefully) every one of your employees, and especially so to 18% of them. There are times to be formal.

The letter itself is much better, but the blog intro is part of the official announcement. It counts.

In this case, what is likely the material difference between that "note" and a "letter"? I can't imagine this note was scrawled with sharpie onto a notepad sized piece of paper with adhesive backing and faint images of fruits or snowmen printed on it.

A note is by definition brief and informal. I think the employees deserve that any official communication in this kind of situation be neither.

Edit: And I'm sure I've put more weight on that one phrase than almost anyone else, but I've worked at startups for years now and been through rounds of layoffs at a couple. It's appropriate to err in the other direction.

You expect better from Zynga? Isn't this the same company that fired people immediately before the IPO so that founders could take back their stock options? "Being a meritocracy is one of their core values."

http://abclocal.go.com/kgo/story?section=news/business&i...

A long formal letter sounds like it would be better on paper, but is that actually true? I can't imagine taking any solace in such a letter if I were working there, whether I was among the shitcanned or not.

Insistence on a long formal letter seems sort of like an east-coast style insistence on wearing a suit; it isn't really "for" anyone. If it makes the wearer/writer feel better about what they are doing then go for it... otherwise who is the party that cares? Pincus is a scumbag but I don't think this is an example of why.

Presumably they talked to the employees affected in person first. Then the email was for everyone left... right?

Nope. I just talked to a friend who works in the SF office and he said he was in the middle of writing an email to his family saying that he wasn't affected when he realized they were still walking around telling people.

Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing].

Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!

Why does Zynga have such a huge payroll?

Blizzard have in thousands mostly because of the Game Masters they need to provide for WoW.

To anyone at Zynga looking for an interesting meaningful challenge that also pays well: Transportation is changing, and InstantCab is on the forefront. We are hiring smart people to join our team of a excellent hackers who are also good people. We are hiring for almost every technical role you can think of.

We have been growing at double digit % every month for several months. Helping people get from A to B seems like a simple problem that anyone can solve, but the real world complexity required to scale such a company demands pretty ingenious solutions and behind the curtain, we are building just such solutions.

Email me: aj@instantcab.com so I can give you more details in a private conversation.

Based on the article, assuming the $80 mil in savings was over 1 year, that means the average Zynga employee costs $153k per year.

Initially that seems a bit high, but after thinking about it a bit, it doesn't seem unreasonable.

LA and NYC are expensive places to live, so the salaries will be bumped up to account for the cost of living.

And the $80 million figure takes into account all of the taxes, social security, unemployment insurance, and benefit costs associated with the employees. An employee making $80k a year can easily cost $100k- $120k a year depending on benefits and taxes.

And its trendy for big name "startup" companies to offer high salaries and costly fringe benefits to attract "rock star" programmers.

80k is definitely too low, practically all big companies in the Bay offer more than that to fresh out of school kids these days.

By the time you add in overhead costs (rent, those free sodas, computers, etc), insurance, taxes, and salary, ~150k per employee is probably about right.

That wouldn't shock me ($153k/yr). Say the average Zynga employee in NY & LA is making $90k, an employee overhead of 1.7x isn't doesn't seem outlandish (especially for a company that has grown very quickly and presumably hasn't had time or energy to streamline costs).

Whatever happens - Pincus will do alright for himself.

He's already done alright for himself, because he was wise enough to take money off the table when he had the opportunity to do so.

What I don't understand is why he's still at it. This must be an enormously stressful time. Why wouldn't he take the rather impressive amount of money he's already made and just go enjoy his life?

Evidence, I suppose, that some of us are just wired differently.

> "This must be an enormously stressful time."

If he's already taken (a lot of) money off the table, what's there (for him) to be stressed about?

You might be different, but I've always found firing employees and/or not meeting expectations pretty stressful, no matter what my personal financial situation.

Well, I'd have had a hard time building an empire off copy/paste game development, spammy-to-fraudulent marketing schemes, encouraged social pressure/spam, an 'arcade' currency, and a pretty shameless twisting of game designs to really squeeze profit from that situation.

So I'm pretty sure the stress I'd personally feel isn't worth talking about.

Which is why I not-so-subtly reframed the assertion in terms of the person who is in that situation.

Because of greed. There is more money he can milk, severance if hes fired, and a huge salary. Not like being CEO is very difficult. You have underlings for everything all you do is say yes/no in meetings and play golf with other CEOs. You have hundreds of managers beneath you for delegating layoffs just send them an email to can half the staff and your days work is done, collect your giant bonus

For certain values of "wise" and "opportunity", sure: https://news.ycombinator.com/item?id=5815128

Some captains refuse to leave their sinking ship.

Zynga might have some fairly tight contractual obligations to Facebook as part of being a preferred content maker on their platform.

Worth investigating, if you're interested in this business.

I had visited the Zynga office a few years back, and was super impressed. Free food/drinks everywhere, and the office looked really nice. They even had Zynga branded water. I had not played any Zynga games until then, but came back thinking these guys must be on to something.

That evening I went back and signed up for Mafia wars. After a few minutes of repeatedly clicking buttons to watch an 'experience meter' rise, I knew this couldn't last. There is of course more to it than just that, but it just wasn't fun or engaging to play. I read a lot about how their analytics gives them an advantage, but I just didn't see the appeal of that game. That bubble had to burst.

Here's the problem:

Virtual Farmville Tractors at Zynga require about (520 this layoff)/(represents 0.18 of workforce) around 3000 people to produce.

Real world tractors at Caterpillar Inc require about (125000 people worldwide)/(about 110 plants) = about 1000 people to produce.

Something wrong when a fake tractor requires more people to produce than a real tractor (yes yes I know that Zynga makes more than Skinner box farm games on the FB platform, but I still found the comparison stunning)

The comparison falls even more short since Zynga develops all aspects of a farm, including animals and crops. And I woukd have to think there are many more virtual farms than real ones.

You are also for some reason comparing all of Zynga with just one Caterpillar plant.

That is true that I compared to only one plant, however caterpillar is a holding company of multiple heavy equipment mfgrs, so it seemed unfair to compare the EMD locomotive factory AND the bulldozer factory vs merely farmville.

On the other hand, there are many more types of caterpillar tractors than farmville tractors, which does even it up a bit.

Maybe I missed it, but I didn't see a WARN act filing by Zynga with the state of California for 2012 or 2013. http://www.edd.ca.gov/jobs_and_Training/Layoff_Services_WARN...

My understanding is that WARN Act notices are required to be filed in CA for layoffs of more than 50 people by larger companies. (Perhaps the LA office has fewer than 50 people?)

Ex-Zynga employee who feels like returning the favor? Make friends with a plaintiff's side employment lawyer. Here's one: http://www.girardgibbs.com/california-warn-act/ (I'm guessing they make waiving the right to such suits a condition of the severance, though.)

Note: I am not a lawyer and I have no idea whether Zynga violated the law. I have no affiliation with the firm linked above. I do not necessarily believe that filing a lawsuit will deliver either emotional or financial vindication, and I have no idea whether or how it might affect one's future employment prospects. But I do believe that all companies should be required to follow the law as written.

I feel really bad for the employees getting laid off, but this feels a lot like a company that assumed growth would be forever up and to the right without leveling off or declining. Maybe when you go from zero to hundreds of millions of dollars in revenue it's easy to feel that way, but I don't see a place where Zynga is going to ever grow very rapidly again like in the "good old days"

as a former Zynga employee, i'm pretty sure the entire management team knows what they are doing, and have expected this for quite some time.

What would you predict Zynga will look like in a year? In five years? Do you think these layoffs are a good or bad thing for the future of the company?

I truly hope this is a "cut once, cut deep" action. There are still a ton of extremely smart people at the company, I just hope they stop overreaching.

It's so weird, Zynga started auspiciously with a core team of some amazingly season develepors and rather than building up an amazing portfolio suddenly ended up doing...well, nothing good.

The writing has been on the wall for a while, if we even see Zynga make it through this year I'd be surprised. You can't assume you're going to win by just thinking 'this will appeal to the masses', you need a hook to engage them. FarmVille worked because people enjoyed it, not the concept, you can't try and shovel the same shit twice.

Plus, Draw Something was a dumb purchase. A great game with low revenues destroyed by high ads and shitty backed service. It was doomed to failure and a massive waste of money that they were too young to afford to risk.

I thought the whole deal with Zynga was that it was circling the drain (yet profitable) while waiting for "real money gaming" to be legal and possible. These cost cutting measures in their legacy business would seem to be a good thing in that light.

I do not know what these 2900 employees do, but not to long ago I played one of their games for a while. Some really big constant problems in their games. Once one thing breaks its takes a long time to get fixed, then it gets fixed but breaks another thing. I remember Thursday before thanksgiving weekend their game gave errors and was unplayable. It took 6 days for they to get it to work.

That really shows devotion to the entertainment sector right? (Maybe it was a bad steak maybe I was the only one seeing these problems, who knows? Ask the company thats cutting 500 employees)

3000 people were making those Zynga games? Doing what exactly? Pls I'm genuinely curious.

These social games seems so lame to me that I can't think of any reason why someone will even think of building a public company on top of it. You simply cannot meet investors' quartely demand when your success is built on being "flavor of the month" business model.

I don't have anything wrong against Zynga or its founder and so I don't wish them failure but this should have come as a common sense that they should have stayed private and stayed lean (both in taking VC funding and the number of employees)

I might be nitpicking here, but the very first sentence reeks of bullshit & PR spin.

"...saying goodbye to 18% of our Zynga brothers & sisters..."

Who says that in real life? "I'm sad, because yesterday 25% of my family had flu"

Stock trading halted after this was published? Did this article beat a planned press release to the punch? If you traded this news you might have had a good day.

So much for Tony Robbins and the “internet treasure”?

http://www.youtube.com/watch?v=ZEojTYYyGA0

Looks like an attempt to re-establishing connection with reality: Flash-games cannot be valued in billions even in a delirium.)

Anyone out there dare to claim there is any "light at the end of the tunnel"?

Perhaps ZNGA is a good stock to buy now that it's over 10% off?

http://www.nasdaq.com/symbol/znga/real-time

I would love to see a breakdown on this. Specifically, the ratio between developers, marketers, management, etc.

Bad news for the educational game accelerator they just launched.

seriously, what did zunga do/make ?

Stock halted. Bracing for a crash.

This will be bad.

The trading halt caught my eye too. Who decides when a stock get's halted to stop it from tanking? If there's a legit system issue with the trading market that the Zynga has no control over sure, I get that, but to keep traders from reacting to the state of the company and/or market itself is pretty shifty.

>Who decides when a stock get's halted to stop it from tanking?

It's partially automated and partially up to the primary market.

Each exchange has circuit breakers for detecting large drops in both the stock's price in a short time period and a drop in liquidity. These are also known as non regulatory halts.

Additionally for material news leaks like this there is a mechanism to manually halt trading. These are known as regulatory halts.

http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts

http://www.nasdaqtrader.com/Trader.aspx?id=tradehaltcodes

LUDP - Volatility Trading Pause

Looks like the circuit breakers were responsible.

Edit: Oh, there were two!

No you're looking at the 15:29:51 halt, which is a circuit breaker.

We were discussing the T3 halt at 14:48:44 which is due to pending news.

while there are any number of reasons a trading halt can occur, few of them are particularly beneficial to zynga. In this case the most likely candidate is public disclosure requirements by the SEC. It is tricky to announce things uniformly across a multitide of outlets, sometimes a press release will go out early and the company will ask for a halt until they can get the rest out. In this case it looks like marketwatch had the news at 2:48 but zynga's official press release didn't hit until 2:52.

This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?

Stocks get halted all the time.

Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility.

What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news.

In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes.

This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.

It often happens after huge news, and it's meant to give investors time to digest it.

I believe the last notable instance was after Jobs died, AAPL was halted.

> I believe the last notable instance was after Jobs died, AAPL was halted.

That depends on your definition of notable. You could always use the "no true Scotsman" logic to say that Steve Jobs death was the last "notable" halt but they happen all the time.

here is the Nasdaq list of halts. Notice that there have been 3 halts already today.

http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts

Here is a list of IROC halts( Canadian)

http://micro.newswire.ca/70886-0.html

Note that there have been 4 halts today for Canadian stocks.

In fact, Zynga's stock was halted multiple times a little over a year ago when Facebook IPO'd.

Also, the halt for Jobs death was after hours so it had a smaller impact.

Hah I knew I would get called on that. Let's change it to "the first one that came to my mind"

It is typical to briefly halt trading in a stock, if a company makes an announcement (or undergoes an unexpected external event) likely to have a non-trivial effect on its stock price. This is to allow time for significant news to disseminate into the marketplace. For this reason, you will frequently see companies make major announcements outside of trading hours.

Stock trading can be halted after big news is released to prevent a panic. It gives the traders enough time to cool down after hearing bad news so they don't all sell at once.

If there's any chance to prevent a crash, a stock halt will help. The crash can still happen, of course.

I think it can be triggered automatically when a major shift happens in a stock. I remember a few of these back in the 2000s when things were crashing left and right.

If a stock falls by x% in time t, it's automagic.

I'm seeing that trading will resume at 3:25 pm ET (in about 10 minutes from time I'm writing this). Grab your popcorn!

I feel like an astronomer who got advance warning of a supernova...

I was wondering why it was still up 0.3% today...

I look at this a little differently, Im not going to opine on the character of the CEO or his employees.

Besides raw economic factors and the trend-happy game industry, I think its worth it to ask:

What on earth are we building? And why are we building it?

Its OK to build games we all need entertainment. Nothing wrong with that. But Zynga games were obsessive click factories which were as far as anyone can tell designed to be addictive.

As an engineer, I have worked at places that had so called "projects" designed to "get more clicks".

That may include a lot of web shops. Usually for ad revenue. But if you think about that from an engineering perspective, what a woeful, sad day it is to have your boss come to you with that mission.

Its the day you realize that what you built has no real value to the user, and is a self serving mechanism to get meaningless clicks out of your robot users.

In the old days we made software that people wanted to use and we didnt care how many times they clicked on a cow.

Or on an ad.

I know how it feels to be in that situation. Best of luck to all the people who got the lay off. Make sure you hit the job search running and be sure to network as much as possible.

no problem, they are pivoting.Why do people hate Zynga so much?

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