Zynga CEO Don Mattrick Rejigs Management, COO David Ko To Leave

(RTTNews) - Online social games developer Zinga, Inc. (ZNGA) announced Tuesday a number of changes to its organization amid a major reorganization in order to achieve revenue growth and improve profitability in the future. The company's new Chief Executive Officer Don Mattrick revealed the changes in an email to employees.

San Francisco, California-based Zynga is the world's largest developer of online social games that are popular in social networking sites such as Facebook Inc. (FB) and on mobile platforms. Its offerings include FarmVille, CityVille, Words With Friends, CastleVille, and Zynga Poker.

The company went public in November 2011 with much hype. However, the company has since been plagued by falling revenues and the exodus of high profile executives.

Zynga's revenues have been trending down with declining user base. Zynga generates majority of its revenues from virtual-goods purchases done by its online gamers and through ads. However, the company has been impacted with user preference now shifting to mobile devices.

In the third quarter, Zynga's daily active users decreased a whopping 45 percent year-over-year to 39 million, while monthly active users dropped 39 percent to 187 million.

Mattrick took over the reins of the company a month ago and has since been reviewing different parts of the business in order to develop a set of operating principles to help reset the company. He has also been interacting with leaders and a cross section of employees to get a general sense of the caliber of the employees to evolve a strong leadership structure.

As part of the reorganization of leadership structure, the company has done away with layers out of the executive rank to get senior leaders closer to important product initiatives to focus directly on resource teams.

The reorganization saw the abrupt departures of three top-level executives. Chief Operating Officer David Ko, Chief Technology Officer Cadir Lee, and Chief People Officer Colleen McCreary are leaving the company to pursue other interests.

"Each person has contributed to the growth of Zynga and I would like to take this opportunity to thank Cadir Lee for his dedication in the creation of a world class technical organization during his 5 year tenure, Colleen for her work with our recruitment and people process over the last 4 years and David Ko for the 3 years that he spent in leading various teams across the organization," Mattrick wrote in the email.

Among major changes, Lee's role has been split between now Chief Technology Officer Nick Tornow, and Chief Information Officer Dorion Carroll. However, the company did not announce a new COO.

Under the new changes, thirteen senior executives will directly report to Mattrick, and they together will form the new executive team with immediate effect. The move will reportedly double the number of senior executives who will report directly to the CEO.

"With the above in place, I believe that we will have the best chance to grow, build a world class executive team and culture, establish cadence and really become committed to important priorities and opportunities for our long term success," Mattrick added.

Mattrick was appointed CEO and a member of the board, effective July 8, to succeed Mark Pincus, who is Zynga's founding CEO. Pincus will remain chairman and chief product officer of the company.

Mattrick, 49, has more than 30 years of executive experience developing, building and managing profitable entertainment businesses. He spent six years at Microsoft Corp. (MSFT), the last three as president of the Interactive Entertainment Business that includes the Xbox 360 video-game console.

Mattrick also served as the president of Worldwide Studios at Electronic Arts Inc. (EA) during his 15-year career there. At the age of 17, Mattrick founded his first company, Distinctive Software, which was later acquired by Electronic Arts in 1991.

In early June, the company also announced plans to cut 520 jobs or 18 percent of its workforce, and closed several of its offices after bookings went weak as some of its games were under performing. The workforce reduction is occurring across all functions and is expected to be substantially complete by August 2013. ZNGA closed Tuesday's regular trading session at $2.81, down $0.03 or 1.02% on a volume of 12.17 million shares.