Scrambling To Cut Costs, Zynga Confirms It Won’t Renew Contracts Of Moderators

It might be the right thing to do for Zynga and the shareholders, but that won’t make it any easier for the game and forum moderators who won’t have their contacts with Zynga renewed. The company is executing the cost-cutting strategy it laid out in its Q3 earnings report by axing some moderator positions and ceasing to start any new contracts.

The lost jobs were first mentioned by the independent “Facebook & Zynga Blog”, and we’ve since confirmed that some outside contractor moderators won’t be coming back. Not all of them as that blog post suggests, though, and these jobs aren’t being outsourced to India. They’re being eliminated entirely until further notice. Here’s Zynga’s statement to TechCrunch:

“As part of the cost reduction program we announced in October, contracts on some outside services, including a portion of our forum moderators, will be allowed to expire.  Player support remains a top priority for Zynga.  Forum moderators will continue to be a feature of all Zynga games, and players will continue to have access to additional support through email, live premium chat and peer groups through social channels.”

Moderators are Zynga’s way of humanizing its games. They help new gamers learn how to play while answering nitty-gritty questions for veterans. The moderators provide customer support, gather info on bugs, and keep the company’s forums civil.

The news follows a large round of around 150 firings, big staff reductions in Austin, and a full shut down of the Boston office in October.

Zynga’s Mark Pincus wrote that layoffs were the “most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors.” That last part is what we’re seeing today. It may be hard on the families of these workers as the holidays approach, but Zynga has to make some tough choices if it’s going to turn the company around, salvage its share price, and make sure the rest of its full-time employees can keep their jobs.

Zynga shares fell 4.9 percent to $2.42 earlier today and is up $0.02 (0.62 percent) in after-hours trading as as of press time. We’ll see if the money saved outweighs the negative reaction to the news and if shares get a bump this evening.