Zynga Layoffs: Social Gaming Company Cuts About 500 Workers

San Francisco, CA — Zynga is laying off about 18 percent of its workforce, showing the door to an estimated 500-plus workers by August.

As part of the layoff, the company will shutter its New York, Los Angeles, and Dallas offices, all of which reportedly will save the financially challenged gaming company about $70 million.

In February, Zynga shut down its Baltimore, McKinney, and Austin offices and gave pink slips to about 30 workers.

Of late, the FarmVille 2 creator been eliminating underperforming games almost regularly to cut costs, including previously planned titles like CityVille, Party Friends, and The Friend Game, with further plans to end PetVille and Mafia Wars 2.

Zynga apparently wants to refocus on mobile applications. CEO Mark Pincus had this to say about this afternoon’s layoff announcement: “None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward. 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.”

Zynga has been fighting an uphill battle to maintain market share in the social gaming world. “The San Francisco-based company has struggled to recapture the buzz that propelled its early games and established it as a leader in social titles. Newer games have failed to gain traction and financial results have slumped, due in part to declining exposure on Facebook Inc.’s social-networking site, traditionally a primary platform. As fewer Facebook users tap into Zynga games like FarmVille and pay real money for items like digital livestock, Zynga has seen its sales steadily drop.”

Zynga also laid off about five percent of its workforce last October, but these staff reductions apparently weren’t enough to stabilize the company’s balance sheet. “Sources said the reason for the more substantive cuts now, after earlier ones in the fall, is because the decline of its Web business has been more drastic than anticipated, said sources, while the rise of its mobile business slower than needed.”

Are you a fan of Zynga? Do you think these layoffs will help the company transition to mobile successfully or are its financial issues deeper?