Social Game Developer RockYou Succumbs To Layoffs To Achieve Profitability

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RockYou, a social game developer, will be laying off a number of employees, we’ve confirmed with the company. The total number of employees being cut, explains CEO Lisa Marino, is 100, but there are two parts to the cuts. First, around forty employees from Playdemic, a social game development studio that RockYou acquired in January, will be rejoining Playdemic as a spinoff as the studio has been sold back to the original founders. The social game Gourmet Ranch will become part of Playdemic.

Marino says that around 56 employees will be let go from RockYou’s headquarters in Redwood city, including some staff from the game organization, media, and general and administrative services. After the Playdemic spinoff and the layoffs, RockYou will be left with half of its staff, with 90-ish employees, says Marino.

She’s careful to explain that this year’s round of layoffs is different from last year’s cutbacks, which took place as the company shifted its focus to social games. “Last year was about finding a business model. This year, it’s about making the company healthy and profitable,” she says. With the layoffs, RockYou is now profitable.

RockYou’s four main business channels are the Zoo World game franchise (which Marino says has doubled revenue per user), the Hooked game franchise, the Galactic Allies title and the media business. Marino says that RockYou will not be launching the upcoming game, Cloudforest.

It’s been a year of highs and lows for the social game developer. In October of 2010, the company was forced to layoff a ‘substantial’ number of its staff. Last November, RockYou’s then CEO Lance Tokuda left the company, and COO Lisa Marino stepped in as CEO.

RockYou has made a number of acquisitions in the social gaming space, including 3 Blokes and of course, Playdemic. In September, RockYou debuted one of its newest games, Gallactic Allies.

“We went too far down the creative path and lost our way in terms of being a profitable organization,” Marino says. “While today is a tough day, I am incredibly bullish on the business going forward.” She added that entire executive team is staying on at RockYou.

The company has raised $129 million to date.