Zynga lays off more than 500 employees, closes LA, NY, and Dallas offices

Social game developer Zynga has laid off 520 employees from their internal teams, and will be closing their Los Angeles, New York and Dallas offices in the process, the company has confirmed. The layoffs amount to about 18 percent of the company's workforce.

A source from the Dallas office told Shacknews that about 60 people were affected there. The announced reduction comes only a few months after the McKinney-based NewToy team, creator of the popular Words with Friends title, was consolidated into the Dallas office, the source said.

A tweet from an artist in Zynga's Los Angeles office (since removed) said 55 people were affected there.

In a letter to Zynga staff, CEO Mark Pincus said (via Polygon) that the move will help the company focus on a commitment to mobile game development:

"Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect," he said. "By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences."

Pincus pointed to the new Running with Friends as an example of the titles it wants to emulate, which has received a positive response from 22,000 players in less than a month since launch. He also noted FarmVille as another success with more than 39 million players.

The staff cuts are expected to save Zynga an estimated $70-$80 million a year. Late last year, Zynga laid off 5% of its staff, closing its Boston studio, and reportedly laying off more than 100 in Austin. In February, Zynga closed its Baltimore studio.