Zynga may struggle to retain its standing as one of the giants of social gaming in the long term, due to increasing levels of internal discord, according to the New York Times' DealBook.

 

Zynga has gained a reputation for unhappy employees, after staff were apparently forced to relinquish pre-IPO shares, something it dismissed.

Further examples of internal strife were highlighted by the employees themselves, as a quarterly staff survey elicited 1,600 responses. Among the criticisms were complaints of long working hours and stressful deadline periods, with one staffer proclaiming an intention to cash in and leave after the company's IPO.

Work hard, work hard

Former employees revealed anonymously the problems running through the company, and warned that staff retention could suffer as a result of the long hours, with managers relentlessly tracking progress and weak links being demoted or let go.

"Zynga should be an example of entrepreneurship at its best," said Roger McNamee, a co-founder of the venture capital firm Elevation Partners.

"Instead it's going to be a Harvard Business School case study on founder over reach — this will be a cautionary tale."

It's thought that Zynga's worsening reputation could be hampering its ability to make deals. Its failed $1 billion bid for PopCap apparently having fallen through due to the latter's founders' concerns over Zynga's tough culture.

PopCap isn't the only company to walk away from the table. It is claimed that a $2.25 billion approach was also made for Angry Birds maker Rovio.

Live and let zy

"I expect a lot of game and tech companies will begin recruiting Zynga's talent after their equity becomes liquid," said Gabrielle Toledano, head of human resources at EA.

"Competitors will make the case that they offer much more compelling opportunities for creative people."

Indeed, it is claimed that cookie baskets had been received by around 150 Zynga employees, as recruitment firms and competitors look to garner favour with disgruntled employees ripe for the poaching.

Don’t zy for me

The intense focus on data driven performance monitoring has led Zynga to attract 270 million unique monthly users and to double its year on year earnings to $830 million in the first nine months of 2011.

Good work is rewarded handsomely, with a paid trip to Las Vegas and $500 a piece being handed to those 80-odd staff members responsible for Mafia Wars' success.

However at the other end of the scale there have been reports of "emotionally charged encounters, including loud outbursts from Mr. Pincus, threats from senior leaders and moments when colleagues broke down into tears."

CPO Colleen McCreary was hired in March 2009 to restructure Zynga's staffing system, and has also said to have been counselling Pincus on his 'managerial tone.'

[source: DealBook]