Zynga To Close Baltimore Office, Consolidate Texas And New York Studios

“We are finding ways to improve our business that position us better for our future success,” COO says.

 @YannickLeJacq on February 25 2013 4:17 PM

Zynga (NASDAQ:ZNGA) is closing down and “consolidating” more of its regional studios in its mission to reach “long-term profitability,” the game developer announced Monday.

The latest round of restructuring will close an office in Baltimore and consolidate the struggling social game developer’s headquarters in New York and Texas. The Texas offices in McKinney and downtown Austin will be closed, but COO David Ko said in a statement that an unspecified number of employees will be relocated to Zynga’s two remaining offices in the state. New York City offices will be similarly restructured around Zynga’s mobile studio there.

In his statement on the company’s blog, Ko described the restructuring as “an effort to leverage resources as we focus on creating franchises and driving profitability.”

“As all of you know, we’ve talked a lot about [how] one of our key strategies for 2013 is driving long-term profitability,” Ko wrote. “With that mindset, we are finding ways to improve our business that position us better for our future success.”

He said Zynga would “relocate everyone in the Baltimore office who requested a transfer, and the overall impact of the consolidations on our team is minimal.”

Ko left the official number of layoffs vague in his statement on the company’s page, but he later told VentureBeat that “these steps will affect approximately 1 percent of our workforce and enable us to focus our resources on the most significant growth opportunities,” an estimate that AllThingsD said tallied about 30 current Zynga employees.

This latest round of layoffs and closures comes shortly after Zynga beat dismal analyst expectations for its fourth quarter earnings. Despite eking out a profit on better-than-expected revenue, David Ko said during a post-earnings report call with investors that Zynga would slim down its operations to cut costs and focus on a small number of its most lucrative game properties. Late last year, during a high-profile announcement from Apple (NASDAQ:AAPL), the company announced a series of dramatic layoffs  and studio closings to correspond with cuts in its full-year financial outlook.

More recently, however, the studio has seen a gradual recovery. Just last week, its stock surged on news that Nevada had enacted a law permitting online gambling in the state, capping several months of lobbying and corporate restructuring on Zynga’s part to rebuild itself as a real-money gaming outlet.

“We still have a lot of work to do,” Ko concluded in his statement Monday, “but I’m confident that we’re on the right path to deliver on the potential of Zynga.”

Zynga shares jumped once again during Monday trading on news of the company’s latest round of consolidations, rising more than 10 percent to $3.69 per share before falling back slightly to close at $3.44. 

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