A quarterly staff survey at Zynga recently solicited 1,600 responses, many angry at the long hours to meet deadlines. The company has maintained very strict standards for its employees, and despite indications that they are open to fixing those HR problems, it could come back to bite the social games company.
“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 overreach — this will be a cautionary tale.”
Despite all the acquisitions by Zynga over the past couple years worth $119 million, they’ve been rebuffed by major parties. PopCap rebuffed a $950 million in cash offer from Zynga because of rumors of their internal politics while Rovio, walked away from a deal worth roughly $2.25 billion in cash and stock.
Already recruitment firms are turning up the heat prior to the IPO. “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 for Electronic Arts. “Competitors will make the case that they offer much more compelling opportunities for creative people.”
CEO Marcus Pincus carefully goes over all the reports for the game using multiple spreadsheets to carefully track the progress of Zynga’s games and its roughly 3,000 employees. “It’s very similar to a New York investment bank,” said Lou Kerner, an analyst at the brokerage firm Liquidnet, who has followed Zynga for years. “It’s data-driven, and it’s intense.”
While Zynga has offered buy backs for certain senior employees, counter to most Silicon Valley start-ups, Pincus sees the company as more of a pure meritocracy. “Mark Pincus has the reputation that he is driven to the point of a madman,” said Michael Pachter, a Wedbush Securities analyst. “Zynga is driven because it has a gigantic competitive advantage right now.”
While the company looks to soften its image, there’s still a headwind of negativity on the employee front, and that the IPO might make ambitious young talent look elsewhere. “We’ve learned that when companies treat talent as a commodity, the consequences are severe,” said Toledano. “It takes years to repair a reputation.”
Source: New York Times