How low can Zygna go?

5 Jun

 

There is a saying “how the might have fallen”. The original saying came from the old testament in the bible referring to King Saul and his son falling in battle. The way it is used here refers to a company, Zygna, who at one time could have been called the king of casual gaming just a couple of years ago. Since then they have seen their stock drop, their status on Facebook drop and the current laying off of 520 employees.

“None of us ever expected to face a day like today, especially when so much of our culture has been about growth,” Zynga CEO Mark Pincus said in an e-mail message to employees on Monday. “But I think we all know this is necessary to move forward.

The year was 2011, a young 4 year old, Zygna, company was riding high as they had most of the top games on Facebook. Everytime they came out with a new game or a new level for an existing game it would become an instant hit. Their future was looking bright and they decided it was time to go public. December of that year the company filed an IPO with a stock offer at $10 a share.

The following year started out well for Zygna still flying high as their stock rose and their games were seeing plenty of traffic. As the year went on though the downward slide began as their top games started to drop, their stock started going down and their stock dropped. Then came the first round of cuts as they let 155 employees go in the fourth quarter of that year.

The down turn kept going in the start of this year and they let 36 more employees go in the first quarter of 2013. With this last round of 520, that is expected to be spread over the next 3 months, it brings the total to 711 employes in just under a year. In the same amount of time their stock went a once lofty $14.50 a share to its current $2.99 a share.

“The scale that served us so well in building and delivering the leading social-gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played,” Pincus said.

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