This is the first I've seen a stock's trading being halted. Does anyone know more about the mechanics of how this works? What the advantages/disadvantages are?
Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility.
What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news.
In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes.
This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.
> I believe the last notable instance was after Jobs died, AAPL was halted.
That depends on your definition of notable. You could always use the "no true Scotsman" logic to say that Steve Jobs death was the last "notable" halt but they happen all the time.
here is the Nasdaq list of halts. Notice that there have been 3 halts already today.
I think it can be triggered automatically when a major shift happens in a stock. I remember a few of these back in the 2000s when things were crashing left and right.
Stock trading can be halted after big news is released to prevent a panic. It gives the traders enough time to cool down after hearing bad news so they don't all sell at once.
If there's any chance to prevent a crash, a stock halt will help. The crash can still happen, of course.
It is typical to briefly halt trading in a stock, if a company makes an announcement (or undergoes an unexpected external event) likely to have a non-trivial effect on its stock price. This is to allow time for significant news to disseminate into the marketplace. For this reason, you will frequently see companies make major announcements outside of trading hours.
The trading halt caught my eye too. Who decides when a stock get's halted to stop it from tanking? If there's a legit system issue with the trading market that the Zynga has no control over sure, I get that, but to keep traders from reacting to the state of the company and/or market itself is pretty shifty.
>Who decides when a stock get's halted to stop it from tanking?
It's partially automated and partially up to the primary market.
Each exchange has circuit breakers for detecting large drops in both the stock's price in a short time period and a drop in liquidity. These are also known as non regulatory halts.
Additionally for material news leaks like this there is a mechanism to manually halt trading. These are known as regulatory halts.
while there are any number of reasons a trading halt can occur, few of them are particularly beneficial to zynga. In this case the most likely candidate is public disclosure requirements by the SEC. It is tricky to announce things uniformly across a multitide of outlets, sometimes a press release will go out early and the company will ask for a halt until they can get the rest out. In this case it looks like marketwatch had the news at 2:48 but zynga's official press release didn't hit until 2:52.
A good reminder to not get stuck in local fad maximums.
Remember when the future of every single company was gamification or bust? Remember when the seemingly only viable business model was skinner boxing rube middle america housewives with no self control (oddly, middle eastern princes also would spend tens of thousands a month on those silly in app purchase games, except they can afford it and don't have their lives ruined with addict-induced credit card debt)?
I don't have a point. Just notice how the "tech press" and fads and media sweeps through in its ever-shortening attention span to the point where they aren't good signals for anything anymore.
Empty, derivative Facebook games are not any more "skinner box" than anything else we either enjoy or do out of necessity. Almost any game ever created could be described as a "skinner box." Completing work units for a salary could be described as a "skinner box." If there is something especially bad or manipulative about Facebook games, it isn't that they are a "skinner box."
Hm. I'm not talking scientifically here or anything, but I've always felt the lack of any kind of depth in most Zynga games makes them feel very skinner box with little pretense beyond that. Most games have complicated stories or game play mechanics. Many Zynga games seem to be "Fill up these three bars by clicking these buttons. Watch them fill. It feels good doesn't it."
Personally I couldn't say that about many other games/work.
Perhaps you're unaware that Zynga explicitly treats games like skinner boxes? Their whole deal was using metrics to manipulate the feedback loop to maximize profit.
Even the most mainstream traditional games were designed to be fun -- they might aim for the lowest common denominator, they may artificially inflate the game length, but the goal was still entertainment. Because all they wanted you to do was buy the game.
That's not the case with the microtransaction free-to-play model -- they need you to not just play the game, but to feel a need to play the game. That means their goal is getting you addicted to the skinner box. The mechanics of such a game are all built to reinforce this goal. Zynga took this to its logical conclusion by A/B testing the various game parameters.
As Tim Rogers said, such games are "a love letter from a computer virus."
>That's not the case with the microtransaction free-to-play model -- they need you to play the game, to feel a need to play the game.
Zynga focuses on mechanics that promote habits, but to say that's the only approach incentivized by F2P is a pretty myopic view of the market.
The F2P model incentivizes addictive gameplay more than other genres, but it's not like building an addicted game was a bad thing pre-F2P. Valve's DOTA 2, for instance, has largely identical gameplay to its 100% free Warcraft 3-based ancestor (tangentially, Team Fortress 2 isn't much of a skinner box either).
> That's not the case with the microtransaction free-to-play model -- they need you to not just play the game, but to feel a need to play the game.
This is actually more true for subscriptions than for F2P. With F2P they need you to have a reason to actively buy things. With subscription, they need you to play enough to find the next month worth paying for.
Whereas one-time box sales the way you're talking about is all about getting you to make the purchase at all.
I think it's less about it being a fad and more about it passing the ethical sniff test. If you end up working for an unethical company, a small error can blow up into a crisis because you were already dancing the line.
When I look at my Facebook news feed, my relatives who don't have a lot of money to throw around use Facebook to post baby photos and talk to their friends. They use Zynga to spend their (little) money on virtual cows/rows in a relational database. Both of these are mindless ways to pass the time, but only one of these should obviously raise red flags as something you should not want to be associated with.
Boy does this suck for Zynga employees. I really feel for the former OMGPOP employees as well- looks like Zynga has taken them down with them. I know that OMGPOP were desperately short of cash themselves, but at least they were the masters of their own destinies.
EDIT: and I wouldn't be too smug about their downfall if I were you. There could be repercussions across the tech sector if Zynga totally fails.
Why? I felt bad for Zynga employees who got screwed earlier since that was the first breach of trust by their CEO and it was still unclear if Zynga was something other than a game-copying exploiter of economically disadvantaged people through game mechanic trickery. But now, after all the dirty laundry has been aired?
edit: Any repercussions for the tech sector if Zynga fails will fall in the "healthy correction" column in my book.
I would assume that he is referring to the possibility of a confidence crash in tech companies that would affect public markets. Personally, I don't think Zynga is widely held enough for it to have much of an impact, and as you mentioned, the dirty laundry has already been aired.
Yeah, I think Zynga failing would have to be coupled with at least a few other non-social-gaming related companies for there to be any market-wide implications due to capital shifting.
edit: honestly if you are worried about market-wide implications wrt ZNGA the stock, if they ousted Pincus and started fixing the company then the short squeeze and the subsequent margin calls would probably be more of concern than the stock cratering, which is what most people expect.
I agree. If somehow Facebook plummeted and bankrupted it would absolutely raise doubts about the tech sector. 1/7 of the world can't use a service it trusts any more is a big deal.
I feel really bad for the employees getting laid off, but this feels a lot like a company that assumed growth would be forever up and to the right without leveling off or declining. Maybe when you go from zero to hundreds of millions of dollars in revenue it's easy to feel that way, but I don't see a place where Zynga is going to ever grow very rapidly again like in the "good old days"
What would you predict Zynga will look like in a year? In five years? Do you think these layoffs are a good or bad thing for the future of the company?
I truly hope this is a "cut once, cut deep" action. There are still a ton of extremely smart people at the company, I just hope they stop overreaching.
Good thing Pincus sold off a bunch of stock [1] -- $190mm worth [2]. Even better, he sold it before the employee lockup expired [3]. Living like a boss == fuck you money in the bank, instead of locked up in a company like suckers (employees and investors). From the stock charts [4], it looks like it closed opening day at $9.50, Pincus and insiders dumped at $12, and if you're a regular employee w/ a 6mo lockup that presumably expired 16 Jun since the company opened 16 Dec 11, you've never seen a price higher than $6.
ps -- dear employees and investors: your ceo dumping big blocks of stock is probably a negative signal
Completely agree with you on this. A CEO dumping a large amount of stock is usually (but not always) a sign of bad things to come and sends a negative signal to the market.
... but exec share dumping is not unusual and happens like clockwork at most companies despite market conditions. Typically execs sell off their shares on a preset schedule, they sell as much as they can as soon as they can because of the bird in hand and all that. The truly evil execs are those that sell-sell-sell as much as they can while telling their employees to hang onto their shares and wait.
there are so many negative signals from Pincus that its hard to count. in particular, you missed the place where he screwed the employees before the IPO as well.
It's hard to feel bad for the employees. Unless it was their dream job to work on manipulative valueless flash games that spam people on Facebook, they chose their place of work for all the wrong reasons.
He's already done alright for himself, because he was wise enough to take money off the table when he had the opportunity to do so.
What I don't understand is why he's still at it. This must be an enormously stressful time. Why wouldn't he take the rather impressive amount of money he's already made and just go enjoy his life?
Evidence, I suppose, that some of us are just wired differently.
You might be different, but I've always found firing employees and/or not meeting expectations pretty stressful, no matter what my personal financial situation.
Well, I'd have had a hard time building an empire off copy/paste game development, spammy-to-fraudulent marketing schemes, encouraged social pressure/spam, an 'arcade' currency, and a pretty shameless twisting of game designs to really squeeze profit from that situation.
So I'm pretty sure the stress I'd personally feel isn't worth talking about.
Which is why I not-so-subtly reframed the assertion in terms of the person who is in that situation.
Because of greed. There is more money he can milk, severance if hes fired, and a huge salary. Not like being CEO is very difficult. You have underlings for everything all you do is say yes/no in meetings and play golf with other CEOs. You have hundreds of managers beneath you for delegating layoffs just send them an email to can half the staff and your days work is done, collect your giant bonus
You are probably right but for some reason I guess I missed the sarcasm. I haven't followed Mark Pincus so I wasn't sure and this isn't reddit so I guess I'm just used to people being more sincere.
Normally, I would definitely be serious and more technical. However, the fact that Pincus is one of the biggest scammers out there and people still: 1) Believe him 2) Invest in his companies 3) Work for him, leads me to be a little sarcastic. It's hard in this day and age with information overload to see people still getting involved in pyramid schemes and wanting to buy snake oil.
Stock trading halted after this was published? Did this article beat a planned press release to the punch? If you traded this news you might have had a good day.
By the time you add in overhead costs (rent, those free sodas, computers, etc), insurance, taxes, and salary, ~150k per employee is probably about right.
That wouldn't shock me ($153k/yr). Say the average Zynga employee in NY & LA is making $90k, an employee overhead of 1.7x isn't doesn't seem outlandish (especially for a company that has grown very quickly and presumably hasn't had time or energy to streamline costs).
Initially that seems a bit high, but after thinking about it a bit, it doesn't seem unreasonable.
LA and NYC are expensive places to live, so the salaries will be bumped up to account for the cost of living.
And the $80 million figure takes into account all of the taxes, social security, unemployment insurance, and benefit costs associated with the employees. An employee making $80k a year can easily cost $100k- $120k a year depending on benefits and taxes.
And its trendy for big name "startup" companies to offer high salaries and costly fringe benefits to attract "rock star" programmers.
You know what the problem here is? There is no material difference between a 10 person game studio and a 3000 person game studio. Zynga likes to pretend that their Z-Cloud gives them an advantage over their competitors. Maybe it does in terms of operations, but games isn't an operations business, it's a hits business. All of the optimization in the world doesn't help if you can't keep making wins and Zynga can't make wins because they're too cluttered with layers of middle management FUD.
520 employees is a lot of people out of work, but I have to think they saw it coming. My advice to people in similar positions all throughout tech is this: there are three signs that indicate an impending downsizing.
* Depressed Stock Value over long periods of time
* An Acceleration of secrecy and fiefdom claiming within the culture
* You look around and no one wants to come to work anymore
If you find yourself in this situation, leave. Find another job. Being caught in a downsizing sucks, but if you pay attention you can avoid them. It's important to make friends and to be able to tell the temperature of your local environment to avoid such devastation.
Edit: This can best be summarized as the well known phenomenon: "There's no such thing as a Free Lunch".
The one sign for impending bankruptcy, sellout, or similar forms of doom: desperate last measures by top management to raise the stock price, presumably so they can make a last profit. E.g. SUNW changing its stock symbol to JAVA just before selling out to Oracle.
My 1st thought was that the difference here is that Apple were broadening their focus, the other two examples were pinning all their hopes on a single product.
I think a comparable change on Apple's part would have been renaming themselves to MacBook with a stock symbol of $MBP (or something equally narrow, as opposed to dropping computer to go after a bigger market).
While this is fair -- and I don't think there's a strong positive outlook on BlackBerry's future -- there were internal discussions for years about whether to change the name of the company or not since BlackBerry was really the only product and was far more recognizable externally than RIM.
I was involved downsize a couple years back, and it turned out well for me. At least with my company they gave a severance package at departure. Better deal then just leaving for a new job.
Not for engineers though. There will be multiple offers in the case of Zynga engineers, so negotiating isn't the issue. It's better financially to get severance.
That doesn't make sense, just because a company has a history of making bad management and product decisions doesn't mean the engineering talent is subpar.
That looks narrow-minded for those particular employers though. The leadership might have made a lot of questionable decisions, but I don't think that should affect the quality of the engineers from that company.
That's unfair on the employees. Sure, Zynga has a reputation as a scummy company with low morals, but I don't think it has a bad technical reputation. And the day-to-day programmers, architects and designers won't have had much influence on the behaviour of the company. I don't think they'll be tarnished, and it would be dumb for a potential employer to reject them just because they worked there.
In the 90s when boo.com imploded (you might not remember them but they were huge) my company wanted to hire some of them. I prevailed against it then. Boo collapsed because they partied their way through their investor's money. Regardless of any other skills, they all had a spectactularly poor attitude to other people's money. You don't want that kind of culture to take root in an organization.
This is nonsensical. What exactly did Zynga do that was so bad? They are still making hundreds of millions of dollars per quarter. That's something most companies will never do. It's not like they committed fraud or anything illegal.
As well, regardless of what you think of Zynga's games or their business strategy, the engineers have really great skills in dealing with some very great technology and high-load situations. They will be extremely marketable.
To paint every single employee with the same paintbrush just because their business isn't something you particularly enjoy is dumb.
If you can, negotiate your new job just before the layoff. Then stay around for the severance package. I was lucky enough to have done that when Kaleida shut down, so I didn't have to compete with everybody else I was working with for a new job in the same field at the same time. (A bunch of them went to Netscape, and I'm sure glad I avoided that trap!)
A long time ago I read an article about companies would actually use rumor and gossip to signal to it's employees that layoffs are pending without actually explicitly saying that. In theory you should be able to use signals to predict things.
In practice I've seen friends completely blindsided by layoffs and I've dodged many a bullet but still didn't see it coming for the other people. I think it can be real difficult to predict these things other than to use your gut if you think something's afoot and be prepared to act preemptively.
There's usually signs, if you're sufficiently attuned to see them. Another thread on HN a few days back led me to write a blog post about one reliable type of "warm up the résumé" indicator:
But it's important that the Variation is indicative. Like if you get baller snacks for a year and lame snacks start coming in, that's a very bad sign. But if you've always had lame snacks that's not a bad sign, your company is just frugal.
"... if you’re in a client-services business, when you visit your clients, make sure to go with them to grab a beverage from their break room before your meeting".
So true. Another good point is to ask to use the restrooms even if you don't really have to go.
I interviewed at one place where I was told over and over how well the company was doing and how the owner loved racing his Porsches at the local road track. Then I saw the restrooms, which looked like they hadn't been updated or fixed in twenty years. I figured out where the money was going... and it wasn't to employees.
Sure enough, the offer came in and it was a lowball. That confirmed my theory.
It's interesting that you mention the Porsche thing. I've always found looking in the company car park on the way into a job interview a pretty reliable measure of how a company is doing and in particular how it treats its staff. Seeing reserved spaces for senior management full of high end executive cars and SUVs, and then a handful of unreserved spaces for everyone else full of much older vehicles without a single high-end or enthusiast model is not a good sign.
Keep in mind that restrooms are often the one part of an office that a company can't upgrade because they're under the control of the landlord and not the tenant. I've worked at a number of companies where we were doing fine, but the bathrooms were terrible because the landlord never, ever updated them from the original build.
I guess I could have added this to the original story, but the company owned and built the building themselves. In the late 70s. And the interior apparently hasn't changed since.
That is what the bad companies will always say, even when it is not true.
Landlords will happily allow the tenant to pay the cost of renovating the bathroom. Good companies understand that certain basic creature comforts for employees are a cost of doing business, and it is very little money in the long haul. Penny-pinching here is a bad sign (unless it is a very early start up, or the company anticipates moving offices within a couple years for some reason).
At Kaleida, the upper management stopped showing up for work all at once, because they were under non-disclosure not to say anything about the impending layoff, and didn't want to encounter anybody in the hallway who wanted to chat.
The "untracked" WFH days suddenly come under scrutiny.
This can also be an indicator of rampant abuse. That is, too many people work at home and don't work much. In my experience, even in small companies, there's a lot of me-too-ism with WFH, which leads to people asking for and being approved to work at home, when they really shouldn't be. Over time, this can lead to a measurable drop in productivity.
Ah, point taken... but this may be a chicken-or-egg problem. If things are such in a company that a significant group of people start abusing WFH, that seems to imply morale has somehow been damaged and people aren't excited about their work(anymore?).
Is WFH-abuse causing low morale/productivity at work, or did something else cause the decline in morale/productivity thus resulting in WFH-abuse.... I dunno.
I wonder which is a better approach: an unilateral barring of WFH days, or an effort to improve team morale to the point where people actually want to come to work.
Yahoo is unilaterally cancelling all work at home plans, but my friend's manager was organically trying to get his team to come in on the WFH Fridays with Friday team events centered around alcohol, and other ways to build camraderie and morale.
Internally, a big leading indicator is usually a constant series of reorgs. Reorgs goeth before the layoffs.
Last-ditch attempts to shuffle the deck chairs usually mean that shit's about to hit the fan. These are usually coupled with the secrecy/fiefdom mentality you mention.
There are only two types of employees in a reorg: those doing the reorganizing, and those being reorganized. If you're frequently among the latter, know that you're also considered expendable enough in a layoff scenario. If your company's gone through several reorgs in rapid succession (more than 2 in a 6-month period, say), it's probably not a bad idea to start planning accordingly.
There are many companies that do reorgs regularly each year as kind of a habitual "churn" process. Do you think this is indicative of anything, or is it just case by case in this case?
Without knowing more about the specific company you are referring to, it's hard to tell, but I would propose that in _most_ situations, it's indicative of a systemic problem.
I'm talking less about planned or regular reorgs. Talking more about multiple reorgs over a shorter-than-usual timeframe. Yearly reorg as a matter of course? Probably nothing to worry about. Two reorgs in the same quarter? Red flag.
Or it can be a great. Severance packages can be quite lucrative.
The better advice I give people is "always be looking for job opportunities". The best job opportunities come when you least expect them, and the worst jobs are taken when you're desperate.
It's a generous payout. The cuts seem indiscriminate when I look at all the talented people being cut. I imagine that it is hard to surgically remove 20% of your workforce.
Right now, I'm torn between looking for work immediately and asking for a delayed start, or going on vacation now and looking for work when I get back.
All I know is that Mars Bar (the local bar) will be busy tonight.
As an aside, this is why the US should have longer mandatory holiday. Taking a vacation would be the last thing on my mind if I was laid off, but our country has 5 weeks of semi-paid holidays a year.
Good luck with your decision, I'm sure you'll land on your feet.
I'm not sure what 3+ months' salary is for you, but I was able to live for a year in NW Thailand for $20k. I wouldn't be the person I am today had I not done that.
I took a few months after my last resignation and it allowed me to really think clearly without the daily distractions of corporate life. It really let me reexamine my priorities and how I want to live going forward, so if you're (a) comfortable financially (I had few if any financial obligations) and (b) are confident in your ability to find a good role in the future, I can vouch for the mental benefits of just taking it easy for a few months, even if you don't do anything "special".
Oh, and thanks for sharing your perspective with us!
I took a really shitty job so I could be close to someone in a country. I had it for almost two years. The job wasn't worth it. But the person in question was.. ten folds. Now, we're trying to settle down, but fixing the job/security situation.
That being said, I am always skeptical at things pointed out as job security.
Didn't we just go through a deep recession? Decent programmers in big cities had nothing to worry about!
Nothing is absolute, if our society collapses, then yeah, programmers might not have an easy time finding a decent job. Short of catastrophic problems, I think programmers are in good shape for a long time.
I would say get stuck in a downsizing. It is great. You are either going to get a salary increase, acceleration, or more equity so they can retain you. You can often negotiate a bit here.
Or, you are going to be let go where you get a good severance. Take some time off, understand your mistake, and move on.
When I resigned from my last job, my last day coincided with a "reorg" that laid off maybe 3% of the workforce that very day (not a very big company though). I remember a coworker telling me, "Hey man, you should get in on that (so you can get severance)" :P
This same exact thing happened to me. Literally on my last day, first thing in the morning was a company wide meeting announcing a 10% layoff, my whole team included. Hard to imagine a more depressing last day. No severance for me, but at least I had a job to go to next.
Packages are great when you can take a whole package then walk across the street and get a new job the day after. The main problem with this strategy is when the year is 2001 and every company in the tech-industry is going bust at the same time.
Or it can be a great. Severance packages can be quite lucrative.
YMMV. I was part of a "10% workforce reduction", which included no severance packages. They gave us advanced notice, but I would have preferred the cash equivalent for that time instead.
I'm sure there's a rant about at will in there somewhere...
Couldn't possibly be a better time to be laid off. Free money, severance package, AND the pick of the litter as to what job you want! Surely anyone who was hired at Zynga would be at least capable of most programming jobs in the country. The world is theirs.
That is, unless Mark Pincus decides to fuck them over. There's always that aspect. (see Tribe.net)
I googled around for a good 10 minutes and read a few TC articles and Pincus' wikipedia article and couldn't figure out what had happened regarding tribe.net (other than an issuing a TRO to a former colleague in 2009). Would you care to elaborate?
Just basically let it die even though there were paying customers. I remember people paying for premium service feeling pretty shitty when the people who ran Tribe couldn't even give a shit to keep the site up for more than a few hours. Tribe died right around the time Zynga's games like FarmVille exploded. It just seemed like he didn't really care about the people who made Tribe a good place to hang out and who kept the site going, and only cared about expanding his own personal portfolio with a game that most people frankly found annoying, especially those who didn't play it.
He didn't do anything all that shitty, but it was enough for me to recognize him as someone who doesn't care about the community-building aspect as much as the "making money" aspect. Because of that, when he does things like this, I don't feel all that surprised.
Severance packages can be good, but you don't want to be the last to leave. I stayed at a company until the bitter end (Chap 11) and got almost no severance. I would have made more money in absolute terms if I had been sacked in the last round of layoffs. I thought I was skilled to avoid the layoffs but really it cost me money.
I'm wondering: is it better to be one of the first to get sacked or the second to last?
It'd seem like the company would have more resources to "pay out" for the earlier rounds, gradually decreasing as the rounds go on. Besides, you probably want to get out of a failing company, and provided that you are competent (though increased competence would in reality lessen the chances of your getting sacked in the first round) I'd think that you'd prefer to get your severance and get out asap.
Heh. Yeah, that's an irony I've seen up close. The worst employees get the best severance, because the company still has money in the first round of layoffs.
My uncle was recently laid off and given severance of a year's salary ($150k). He got another $150k job soon after. He'll make $300k this year. This is in Missouri, where that's a lot of money.
That's great to hear and it's a wonderful turn of events, but I shudder thinking about the tax bill (though obviously you're coming out ahead no matter what)
One of my favorite breweries (Strange Brewing Company - http://www.strangebrewingco.com/) essentially started on two severance packages from the Rocky Mountain News. Those guys definitely won when they lost their jobs.
There's nothing wrong with taking a job when you're desperate. It gives you breathing room to look for another job, and companies are more willing to bargain when you have a job.
The problem comes when you take a job because you're desperate and then stay because you're lazy.
> ...games isn't an operations business, it's a hits business.
It depends on the game. Low-engagement games like Zynga titles are definitely hits businesses. However, game companies are starting to figure out that hits aren't sustainable. You have to create lifestyles that make people say, "I'm a X game player," not just "I play X game," and that means exceptional, reliable game experiences that extend outside the game. Creating a great Games as a Service company REQUIRES really awesome operational expertise. Game studios and publishers that want to provide those kinds of experiences really do need to have solid operations, and not just in their technology. The entire experience, from their support to their online presence to their in-person events, has to be buttoned up tight.
>...* that means exceptional, reliable game experiences that extend outside the game.*
This is something Zynga has never, will never understand. They don't have a deep understanding of games - they have a deep understanding of rapid ~~~thievery~~~ emulation and deployment.
Fear - uncertainty - doubt. Basically when people kill good ideas by focusing on only the bad aspects and risks. It can happen when people are too conservative and want to keep the status quo, or aggressively to undermine competing interests.
Bashing z-cloud is unwarranted and irrelevant to the point you make. A piece of technology that saves a company millions of dollars has no place in your diatribe against its management or creative output.
I know how it feels to be in that situation. Best of luck to all the people who got the lay off. Make sure you hit the job search running and be sure to network as much as possible.
I have only passively been paying attention to Zynga. I do feel bad for people who are now out of work. However, the staggering thing about this article to me was that 520 people only represents 18 percent of their employees. That means that after this, there's an astonishing 2300+ people still working on Farmville and friends. Coming from a nonprofit biomedical research group where I struggle to get single digit numbers of developers, that is mind-bending.
Hey JunkDNA, I was hoping to learn a little more about what you do and your field. I'm going to be graduating soon with a bachelors degree in biochemistry, and I would consider myself a fairly competent developer, so I'm looking to start doing some real scientific work soon beyond just vanilla software development. From your standpoint, what does the biomedical landscape look like and what kinds of things would developers be focused on?
My email is pvnick@gmail.com if you'd like to talk. I look forward to hearing from you :)
The takeaway here, for me at least, is that Zynga got a lot of early success via a couple smart exploits-- early social network virality (since shut down by Facebook et al. because spammy Farmville requests hurt user experience) and freemium gaming (which has been embraced by the rest of the competition and no longer serves as a competitive advantage). So Zynga now has to be just another gaming company, and gaming, as an industry, is high-overhead and high-risk, with a lot of very serious competition. There's no hockey stick in running a big gaming conglomerate; it's just a media business. If you have a hit, you make money for a while, if you don't, you lose. Just like running a record label or a movie studio.
> The move today will affect every part of the San Francisco social gaming company . . .
Zynga is a gaming company? That's news to me -- I thought they were still in the business of tricking people into paying for the privilege to click things faster.
Is it any surprise that wasn't enough to sustain a company?
Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing].
Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
Well, considering that their industry didn't exist very long ago, 2000+ employees is still commendable [ie if they had gotten there with no layoffs we'd be saying how great they are doing].
Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
"Our Founder and CEO Mark Pincus today sent a note to employees
outlining structural changes..."
It might seem like a small thing to some, but I can't believe the casual language on the blog post introduction. The CEO "sent a note" to his company?
I'm sure that softened the blow to those 520 people. It was just a note, after all.
I don't care what your culture is like or that you want to be a "cool" company. Notes are for reminding people to clear their old food from the fridge, or seeing if anyone wants to get together after work to welcome the new guy. This is serious shit to (hopefully) every one of your employees, and especially so to 18% of them. There are times to be formal.
The letter itself is much better, but the blog intro is part of the official announcement. It counts.
In this case, what is likely the material difference between that "note" and a "letter"? I can't imagine this note was scrawled with sharpie onto a notepad sized piece of paper with adhesive backing and faint images of fruits or snowmen printed on it.
A note is by definition brief and informal. I think the employees deserve that any official communication in this kind of situation be neither.
Edit: And I'm sure I've put more weight on that one phrase than almost anyone else, but I've worked at startups for years now and been through rounds of layoffs at a couple. It's appropriate to err in the other direction.
You expect better from Zynga? Isn't this the same company that fired people immediately before the IPO so that founders could take back their stock options? "Being a meritocracy is one of their core values."
A long formal letter sounds like it would be better on paper, but is that actually true? I can't imagine taking any solace in such a letter if I were working there, whether I was among the shitcanned or not.
Insistence on a long formal letter seems sort of like an east-coast style insistence on wearing a suit; it isn't really "for" anyone. If it makes the wearer/writer feel better about what they are doing then go for it... otherwise who is the party that cares? Pincus is a scumbag but I don't think this is an example of why.
Nope. I just talked to a friend who works in the SF office and he said he was in the middle of writing an email to his family saying that he wasn't affected when he realized they were still walking around telling people.
The gaming industry is so fucked. On one hand, you've got huge conglomerates like EA that release shitty game after shitty game with invasive DRM that would make Orwell cringe, and on the other you've got 2300+ people working on Farmville. I just feel bad for indie developers that release progressive and inventive games competition after competition with tiny teams of 1-2 and live on shoestring/student budgets.
Steam Greenlight ended up being more of a failure than a success, next-gen consoles won't even give a shit about indies, and we wonder why this industry is so screwed up. Don't even get me started on the lack of proper infrastructure for competitive games, etc (at least in the West). The whole thing is just depressing.
There's never been a better time to be an indie developer, particularly on the PC. Marketing remains difficult, but now there are virtually no barriers. Digital distribution and engines like Unity have changed everything.
Steam has its problems, and I wish they'd just shift to an Apple-style app store model with a curated storefront. But in general, they've been a huge boon to independent developers.
>I wish they'd just shift to an Apple-style app store model
If they lowered the minimum prices too, I wouldn't mind. But right now Steam has a lot of third-rate "side-project" games that are lower quality than free flash games online charging the price of a very good iOS/Android game and it's getting annoying.
Now, I'm not one to think saturation with lower quality/more indie stuff is always bad (especially with music, for example) but it seems with the ubiquity of PC game development as a hobby, a decent amount of crap is a byproduct.
Zynga's fatal flaw was depending on a platform that they don't control (Facebook) in order to make money. Twitter third-party developers got burned by this not that long ago in the past.
I don't buy this at all, nor do I believe that this is a
It seems like everyone blames everything on either the economy or a shift to mobile these days. Intel, Microsoft, EA, and now Zynga. All of this despite the fact that dekstop traffic has remained steady or grown, even in the last two years. Yes, more people are accessing the web via mobile, but it's still only 15%. [1]
Do you see Activision-Blizzard and Steam talking about how mobile is stealing their lunch? Nah, they're too busy eating Zynga and EA's lunches.
I have yet to see any data showing that EA or Zynga are shrinking based on forces beyond their control. I bet the guys on /r/gaming - annoying though they can be - could give you a better idea than journalists who buy the PR lines. This isn't some totally-unforeseen and cataclysmic surge to mobile.
We're talking about a company with a reputation for churning out unoriginal copies of smaller/indie games. THAT is their problem. If Zynga wants to grown, they must focus on original and high-quality games. Costs and risks are much higher, but that's what people are willing to pay real money for.
It's really casual gaming that's suffering from this: folks are switching from playing those types of games on Facebook to playing them on their phones.
To anyone at Zynga looking for an interesting meaningful challenge that also pays well: Transportation is changing, and InstantCab is on the forefront. We are hiring smart people to join our team of a excellent hackers who are also good people. We are hiring for almost every technical role you can think of.
We have been growing at double digit % every month for several months. Helping people get from A to B seems like a simple problem that anyone can solve, but the real world complexity required to scale such a company demands pretty ingenious solutions and behind the curtain, we are building just such solutions.
Email me: aj@instantcab.com so I can give you more details in a private conversation.
It's so weird, Zynga started auspiciously with a core team of some amazingly season develepors and rather than building up an amazing portfolio suddenly ended up doing...well, nothing good.
The writing has been on the wall for a while, if we even see Zynga make it through this year I'd be surprised. You can't assume you're going to win by just thinking 'this will appeal to the masses', you need a hook to engage them. FarmVille worked because people enjoyed it, not the concept, you can't try and shovel the same shit twice.
Plus, Draw Something was a dumb purchase. A great game with low revenues destroyed by high ads and shitty backed service. It was doomed to failure and a massive waste of money that they were too young to afford to risk.
301 comments
[ 3.9 ms ] story [ 271 ms ] threadThis will be bad.
Sometimes for news, sometimes due to a fat finger, sometimes due to market volatility.
What normally happens in the case of news is that the stock will be halted before the news comes out and then the stock will reopen sometime after the news so that everyone has a chance to digest the news.
In the case of a fat finger or market crash things are a little different. In that case trads can be undone, meaning that if you bought as the stock crashed you could get your trade busted. After the trades have been undone, the exchanges make sure there is adequate liquidity on either side of the book and trading resumes.
This second case is a bitch for automated trading systems as we(the designers) don't often take this into account and even less frequently get a chance to test this case in the wild.
I believe the last notable instance was after Jobs died, AAPL was halted.
That depends on your definition of notable. You could always use the "no true Scotsman" logic to say that Steve Jobs death was the last "notable" halt but they happen all the time.
here is the Nasdaq list of halts. Notice that there have been 3 halts already today.
http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts
Here is a list of IROC halts( Canadian)
http://micro.newswire.ca/70886-0.html
Note that there have been 4 halts today for Canadian stocks.
Also, the halt for Jobs death was after hours so it had a smaller impact.
If there's any chance to prevent a crash, a stock halt will help. The crash can still happen, of course.
It's partially automated and partially up to the primary market.
Each exchange has circuit breakers for detecting large drops in both the stock's price in a short time period and a drop in liquidity. These are also known as non regulatory halts.
Additionally for material news leaks like this there is a mechanism to manually halt trading. These are known as regulatory halts.
http://www.nasdaqtrader.com/Trader.aspx?id=tradehaltcodes
LUDP - Volatility Trading Pause
Looks like the circuit breakers were responsible.
Edit: Oh, there were two!
We were discussing the T3 halt at 14:48:44 which is due to pending news.
Remember when the future of every single company was gamification or bust? Remember when the seemingly only viable business model was skinner boxing rube middle america housewives with no self control (oddly, middle eastern princes also would spend tens of thousands a month on those silly in app purchase games, except they can afford it and don't have their lives ruined with addict-induced credit card debt)?
I don't have a point. Just notice how the "tech press" and fads and media sweeps through in its ever-shortening attention span to the point where they aren't good signals for anything anymore.
Personally I couldn't say that about many other games/work.
Even the most mainstream traditional games were designed to be fun -- they might aim for the lowest common denominator, they may artificially inflate the game length, but the goal was still entertainment. Because all they wanted you to do was buy the game.
That's not the case with the microtransaction free-to-play model -- they need you to not just play the game, but to feel a need to play the game. That means their goal is getting you addicted to the skinner box. The mechanics of such a game are all built to reinforce this goal. Zynga took this to its logical conclusion by A/B testing the various game parameters.
As Tim Rogers said, such games are "a love letter from a computer virus."
http://www.actionbutton.net/?p=1076
(Warning: long but insightful article (But if you recognize the author's name you'd already know that.))
Zynga focuses on mechanics that promote habits, but to say that's the only approach incentivized by F2P is a pretty myopic view of the market.
The F2P model incentivizes addictive gameplay more than other genres, but it's not like building an addicted game was a bad thing pre-F2P. Valve's DOTA 2, for instance, has largely identical gameplay to its 100% free Warcraft 3-based ancestor (tangentially, Team Fortress 2 isn't much of a skinner box either).
This is actually more true for subscriptions than for F2P. With F2P they need you to have a reason to actively buy things. With subscription, they need you to play enough to find the next month worth paying for.
Whereas one-time box sales the way you're talking about is all about getting you to make the purchase at all.
That's a good goal - but how do you know in advance whether it's a fad (like Zynga) or the real deal (like Facebook)?
When I look at my Facebook news feed, my relatives who don't have a lot of money to throw around use Facebook to post baby photos and talk to their friends. They use Zynga to spend their (little) money on virtual cows/rows in a relational database. Both of these are mindless ways to pass the time, but only one of these should obviously raise red flags as something you should not want to be associated with.
That quote made my day. HAve you been reading Gibson or Stross novels lately? :)
EDIT: and I wouldn't be too smug about their downfall if I were you. There could be repercussions across the tech sector if Zynga totally fails.
edit: Any repercussions for the tech sector if Zynga fails will fall in the "healthy correction" column in my book.
edit: honestly if you are worried about market-wide implications wrt ZNGA the stock, if they ousted Pincus and started fixing the company then the short squeeze and the subsequent margin calls would probably be more of concern than the stock cratering, which is what most people expect.
ps -- dear employees and investors: your ceo dumping big blocks of stock is probably a negative signal
[1] http://online.wsj.com/article/SB1000142405270230472440457729...
[2] http://www.forbes.com/sites/nathanvardi/2012/10/05/zynga-kee...
[3] http://www.huffingtonpost.com/2012/07/31/zynga-insider-tradi...
[4] http://www.google.com/finance?cid=481720736332929
updated to include pricing. Again, selling at 2x your employees == living like a fucking boss.
What I don't understand is why he's still at it. This must be an enormously stressful time. Why wouldn't he take the rather impressive amount of money he's already made and just go enjoy his life?
Evidence, I suppose, that some of us are just wired differently.
Worth investigating, if you're interested in this business.
If he's already taken (a lot of) money off the table, what's there (for him) to be stressed about?
So I'm pretty sure the stress I'd personally feel isn't worth talking about.
Which is why I not-so-subtly reframed the assertion in terms of the person who is in that situation.
This is also a reminder that only very few companies caught up in the bubble have real business models that will last when the bubble pops.
You have to wonder how ethical he really is?
http://techcrunch.com/2009/10/31/scamville-the-social-gaming...
Sidenote: Does HN stop editing after a certain timeframe? I can't find a link to edit my original comment to add this.
Yup. The time frame is ~15 minutes, AFAICT. Same with deleting, though I think that's about an hour. Don't quote me on those numbers.
LA and NYC are expensive places to live, so the salaries will be bumped up to account for the cost of living.
And the $80 million figure takes into account all of the taxes, social security, unemployment insurance, and benefit costs associated with the employees. An employee making $80k a year can easily cost $100k- $120k a year depending on benefits and taxes.
And its trendy for big name "startup" companies to offer high salaries and costly fringe benefits to attract "rock star" programmers.
520 employees is a lot of people out of work, but I have to think they saw it coming. My advice to people in similar positions all throughout tech is this: there are three signs that indicate an impending downsizing.
* Depressed Stock Value over long periods of time
* An Acceleration of secrecy and fiefdom claiming within the culture
* You look around and no one wants to come to work anymore
If you find yourself in this situation, leave. Find another job. Being caught in a downsizing sucks, but if you pay attention you can avoid them. It's important to make friends and to be able to tell the temperature of your local environment to avoid such devastation.
Edit: This can best be summarized as the well known phenomenon: "There's no such thing as a Free Lunch".
Right on.
I'm just saying.
EDIT: Downvoters, do you really not think that a person's personal ethics can be judged from the work they choose to do?
But silly mobile games using a business model SV geeks don't like? No. In the grand scheme of things Zynga is trivial and harmless.
In the "grand scheme" those "whales" are lost in the noise, so yes. In the grand scheme they were trivial and harmless.
As well, regardless of what you think of Zynga's games or their business strategy, the engineers have really great skills in dealing with some very great technology and high-load situations. They will be extremely marketable.
To paint every single employee with the same paintbrush just because their business isn't something you particularly enjoy is dumb.
In practice I've seen friends completely blindsided by layoffs and I've dodged many a bullet but still didn't see it coming for the other people. I think it can be real difficult to predict these things other than to use your gut if you think something's afoot and be prepared to act preemptively.
http://jasonlefkowitz.net/2013/05/introducing-lefkowitzs-law...
But it's important that the Variation is indicative. Like if you get baller snacks for a year and lame snacks start coming in, that's a very bad sign. But if you've always had lame snacks that's not a bad sign, your company is just frugal.
So true. Another good point is to ask to use the restrooms even if you don't really have to go.
I interviewed at one place where I was told over and over how well the company was doing and how the owner loved racing his Porsches at the local road track. Then I saw the restrooms, which looked like they hadn't been updated or fixed in twenty years. I figured out where the money was going... and it wasn't to employees.
Sure enough, the offer came in and it was a lowball. That confirmed my theory.
Landlords will happily allow the tenant to pay the cost of renovating the bathroom. Good companies understand that certain basic creature comforts for employees are a cost of doing business, and it is very little money in the long haul. Penny-pinching here is a bad sign (unless it is a very early start up, or the company anticipates moving offices within a couple years for some reason).
Here's something I wrote about MaxScript: Automating The Sims Character Animation Pipeline with MaxScript http://www.donhopkins.com/drupal/node/30
I wonder what would happen if they try to find a way to sell that as a service?
- The free food/snacks get cancelled.
- The "untracked" WFH days suddenly come under scrutiny.
This can also be an indicator of rampant abuse. That is, too many people work at home and don't work much. In my experience, even in small companies, there's a lot of me-too-ism with WFH, which leads to people asking for and being approved to work at home, when they really shouldn't be. Over time, this can lead to a measurable drop in productivity.
Yahoo is unilaterally cancelling all work at home plans, but my friend's manager was organically trying to get his team to come in on the WFH Fridays with Friday team events centered around alcohol, and other ways to build camraderie and morale.
Relevant recent discussion: The Elves Leave Middle Earth – Sodas Are No Longer Free (2009)
https://news.ycombinator.com/item?id=5751329
In defense of the Google chef (2011)
https://news.ycombinator.com/item?id=3223595
http://blog.rongarret.info/2011/11/in-defense-of-google-chef...
Ironic that his restaurant is only so-so wrt bang for the buck.
Last-ditch attempts to shuffle the deck chairs usually mean that shit's about to hit the fan. These are usually coupled with the secrecy/fiefdom mentality you mention.
There are only two types of employees in a reorg: those doing the reorganizing, and those being reorganized. If you're frequently among the latter, know that you're also considered expendable enough in a layoff scenario. If your company's gone through several reorgs in rapid succession (more than 2 in a 6-month period, say), it's probably not a bad idea to start planning accordingly.
Or it can be a great. Severance packages can be quite lucrative.
The better advice I give people is "always be looking for job opportunities". The best job opportunities come when you least expect them, and the worst jobs are taken when you're desperate.
Did you think it was fair? Did you think you were ripped off? Angry? Sad? Depressed?
I've left a few jobs but always on my own accord, so I'd appreciate having a glimpse of the psyche in going through an involuntary departure.
Right now, I'm torn between looking for work immediately and asking for a delayed start, or going on vacation now and looking for work when I get back.
All I know is that Mars Bar (the local bar) will be busy tonight.
Good luck with your decision, I'm sure you'll land on your feet.
Oh, and thanks for sharing your perspective with us!
my friend got 6 months after talking to HR and agreeing to sign the doc. remember, no one asks you to sign something for your benefit :)
If I could suggest one thing for a young programmer to tattoo onto their inner arm, it would be that sentence right there.
That being said, I am always skeptical at things pointed out as job security.
Nothing is absolute, if our society collapses, then yeah, programmers might not have an easy time finding a decent job. Short of catastrophic problems, I think programmers are in good shape for a long time.
Or, you are going to be let go where you get a good severance. Take some time off, understand your mistake, and move on.
I appreciated his good natured humor :)
The other effect is whether you can handle the downturn in company morale. It is like smiling while the ship is sinking. It is not a good feeling.
YMMV. I was part of a "10% workforce reduction", which included no severance packages. They gave us advanced notice, but I would have preferred the cash equivalent for that time instead.
I'm sure there's a rant about at will in there somewhere...
That is, unless Mark Pincus decides to fuck them over. There's always that aspect. (see Tribe.net)
He didn't do anything all that shitty, but it was enough for me to recognize him as someone who doesn't care about the community-building aspect as much as the "making money" aspect. Because of that, when he does things like this, I don't feel all that surprised.
You want to be the second to last to leave.
It'd seem like the company would have more resources to "pay out" for the earlier rounds, gradually decreasing as the rounds go on. Besides, you probably want to get out of a failing company, and provided that you are competent (though increased competence would in reality lessen the chances of your getting sacked in the first round) I'd think that you'd prefer to get your severance and get out asap.
The problem comes when you take a job because you're desperate and then stay because you're lazy.
It depends on the game. Low-engagement games like Zynga titles are definitely hits businesses. However, game companies are starting to figure out that hits aren't sustainable. You have to create lifestyles that make people say, "I'm a X game player," not just "I play X game," and that means exceptional, reliable game experiences that extend outside the game. Creating a great Games as a Service company REQUIRES really awesome operational expertise. Game studios and publishers that want to provide those kinds of experiences really do need to have solid operations, and not just in their technology. The entire experience, from their support to their online presence to their in-person events, has to be buttoned up tight.
This is something Zynga has never, will never understand. They don't have a deep understanding of games - they have a deep understanding of rapid ~~~thievery~~~ emulation and deployment.
My email is pvnick@gmail.com if you'd like to talk. I look forward to hearing from you :)
Zynga is a gaming company? That's news to me -- I thought they were still in the business of tricking people into paying for the privilege to click things faster.
Is it any surprise that wasn't enough to sustain a company?
Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
Its a young company, who knows what form it survives in but that it go so far so fast is pretty impressive!
I'm sure that softened the blow to those 520 people. It was just a note, after all.
I don't care what your culture is like or that you want to be a "cool" company. Notes are for reminding people to clear their old food from the fridge, or seeing if anyone wants to get together after work to welcome the new guy. This is serious shit to (hopefully) every one of your employees, and especially so to 18% of them. There are times to be formal.
The letter itself is much better, but the blog intro is part of the official announcement. It counts.
Edit: And I'm sure I've put more weight on that one phrase than almost anyone else, but I've worked at startups for years now and been through rounds of layoffs at a couple. It's appropriate to err in the other direction.
http://abclocal.go.com/kgo/story?section=news/business&i...
Insistence on a long formal letter seems sort of like an east-coast style insistence on wearing a suit; it isn't really "for" anyone. If it makes the wearer/writer feel better about what they are doing then go for it... otherwise who is the party that cares? Pincus is a scumbag but I don't think this is an example of why.
http://www.youtube.com/watch?v=ZEojTYYyGA0
Steam Greenlight ended up being more of a failure than a success, next-gen consoles won't even give a shit about indies, and we wonder why this industry is so screwed up. Don't even get me started on the lack of proper infrastructure for competitive games, etc (at least in the West). The whole thing is just depressing.
Indies were given a disproportionate amount of attention at the PlayStation4 reveal.
Steam has its problems, and I wish they'd just shift to an Apple-style app store model with a curated storefront. But in general, they've been a huge boon to independent developers.
If they lowered the minimum prices too, I wouldn't mind. But right now Steam has a lot of third-rate "side-project" games that are lower quality than free flash games online charging the price of a very good iOS/Android game and it's getting annoying.
Now, I'm not one to think saturation with lower quality/more indie stuff is always bad (especially with music, for example) but it seems with the ubiquity of PC game development as a hobby, a decent amount of crap is a byproduct.
Disclaimer: I work for OUYA.
The mobile games market is still young.
"...saying goodbye to 18% of our Zynga brothers & sisters..."
Who says that in real life? "I'm sad, because yesterday 25% of my family had flu"
I don't buy this at all, nor do I believe that this is a
It seems like everyone blames everything on either the economy or a shift to mobile these days. Intel, Microsoft, EA, and now Zynga. All of this despite the fact that dekstop traffic has remained steady or grown, even in the last two years. Yes, more people are accessing the web via mobile, but it's still only 15%. [1]
Do you see Activision-Blizzard and Steam talking about how mobile is stealing their lunch? Nah, they're too busy eating Zynga and EA's lunches.
I have yet to see any data showing that EA or Zynga are shrinking based on forces beyond their control. I bet the guys on /r/gaming - annoying though they can be - could give you a better idea than journalists who buy the PR lines. This isn't some totally-unforeseen and cataclysmic surge to mobile.
We're talking about a company with a reputation for churning out unoriginal copies of smaller/indie games. THAT is their problem. If Zynga wants to grown, they must focus on original and high-quality games. Costs and risks are much higher, but that's what people are willing to pay real money for.
[1] http://searchengineland.com/report-mobile-traffic-to-local-s...
We have been growing at double digit % every month for several months. Helping people get from A to B seems like a simple problem that anyone can solve, but the real world complexity required to scale such a company demands pretty ingenious solutions and behind the curtain, we are building just such solutions.
Email me: aj@instantcab.com so I can give you more details in a private conversation.
The writing has been on the wall for a while, if we even see Zynga make it through this year I'd be surprised. You can't assume you're going to win by just thinking 'this will appeal to the masses', you need a hook to engage them. FarmVille worked because people enjoyed it, not the concept, you can't try and shovel the same shit twice.
Plus, Draw Something was a dumb purchase. A great game with low revenues destroyed by high ads and shitty backed service. It was doomed to failure and a massive waste of money that they were too young to afford to risk.