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The Five Dumbest Things on Wall Street This Week: Oct. 26

2. Ready, Apple, Fire

The tech world screeched to a halt Tuesday when Apple (AAPL) unveiled its new iPad Mini. Zynga (ZNGA - Get Report) CEO Mark Pincus, however, kept on firing.


As Apple's marketing chief Phil Schiller was striding across the stage in San Jose, holding aloft the new iPad Mini to the enraptured masses as if he was Moses presenting the Ten Commandments, Pincus was busy making moves as well, although in a manner far more ungodly.

Using Apple's event as cover, Pincus laid off 5% of the company's full-time workforce, or about 150 of Zynga's 2,900 workers, and shut its Boston office. The company, which has seen its stock plummet almost 80% since its high profile IPO last year, also plans to "sunset" 13 unspecified older titles, said Pincus in a staff memo on Tuesday.

"This is 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," wrote Pincus, who added that the cuts at the FarmVille maker would presage "more stringent budget and resource allocation around new games and partner projects."

Pardon us Pincus, but you must admit that "painful" is a relative term. Clearly the pain you are referring to is being felt more acutely by your fleeced shareholders and recently canned workers than yourself. We seem to remember you selling about $200 million in stock earlier this year, an amount that should surely dull any or your personal proverbial pain.

And as for that "more stringent resource allocation" of which you blog, we guess that means you will think next time before playing games with shareholder money like your disastrous $180 million purchase of game studio OMGPOP in March. That acquisition was written down by $90 million this month.

Shares of the company momentarily popped Wednesday morning on news of the layoffs, presumably because Wall Street typically cheers any firings other than their own. And the stock jumped even higher on Thursday, touching $2.50 a share, when traders used the company's better than expected Q3 revenue number and U.K. gambling deal as a buying opportunity.

But it was Pincus' opportunistic use of Apple's event to perform his own dirty work that really peeved the gaming community. Apparently for gamers, firing folks during an Apple product launch is a worse social foul than scheduling a wedding ceremony on Super Bowl Sunday.

Ian Miles Cheong, editor-in-chief at, for example, tweeted at the time, "Zynga just fired over a hundred people, giving them two hours to clear out their desks. They did it during the Apple keynote to avoid press."

And Cheong was not alone in questioning Pincus' timing. Indignant tweets about Zynga's iPad Mini-massacre lit up the gaming community, leading us to think that the next time Apple launches a gadget then Zynga's remaining employees better run for safety.

One more Mini and it could be a big game over.
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