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...