updated 07:22 pm EST, Tue November 13, 2012
Latest move consolidates executive duties, saves payroll costs
Beleaguered social game developer Zynga announced a wide range of executive changes today. Headlining the shakeup, Chief Financial Officer David Wehner has departed, and has been replaced by the company's top accounting executive Mark Vranesh. Wehner will fill a role at Facebook following his departure. Other changes include David Ko as chief operations officer, vacant since John Schappert vacated the position in August. Barry Cottle has been named as chief revenue officer, and Steven Chiang was promoted and is now responsible for oversight of all game development. All executive changes were approved by the board of directors on November 7.
"Mark, David, Barry and Steve are rooted in our culture, committed to our future and part of the talented bench of leadership at Zynga," CEO Mark Pincus said in a memo to staff. "I'm confident we have the right team to deliver on our mission of connecting the world through games and position us for long-term growth."
Brokerages and market analysts have dropped price targets on Zynga stock by up to 40 percent after the social game maker slashed its 2012 guidance further due to revenue damage from departing gamers. Zynga said it was losing paid customers from Facebook games CityVille and FarmVille, and reduced its annual guidance for the second time this year. Since the IPO in December 2011, the company has lost 75 percent of its market value.
Two insider trading suits have been filed against the company, and follow investigations of Zynga staffers and Pincus. He and other high-ranking Zynga employees are accused of selling 43 million shares of stock in April at $12 per share, when employees and other early investors were banned from selling until May. By then, the stockholders claim, the business had already begun to slump.
Zynga is also facing a lawsuit from gaming giant EA, claiming the social games developer has violated copyright law. The complaint focuses on Facebook game The Ville, where Zynga is accused of infringing on The Sims Social, EA's own casual gaming endeavor. EA believes The Ville "blatantly mimic[s] the entire framework and style of gameplay," making the two games "nearly indistinguishable."