Social gaming giant Zynga has announced that it is laying off 520 employees as well as shutting down OMGPOP studio as a part of “substantial cost reductions” across its offices. In a move to reduce its cost structure, Zynga will be letting go of about 18 percent of its workforce.

Describing it as a “hard day” in a note to employees, Zynga ‘s CEO Mark Pincus  wrote on the company blog: “I think we all know this is necessary to move forward. The scale that served us so well in building and delivering the leading social gaming service on the web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played.”

Massive layoffs under way

Massive layoffs under way

Pincus assured in the post that the employees being affected by the layoffs will be offered “generous severance packages”. While the blog does not shed light upon which of Zynga’s offices are going to be affected, AllThingsD says that the social gaming company will be shuttering its New York, Dallas and Los Angeles offices.

This isn’t just it; it appears that Zynga is now also shutting down OMGPOP, the studio behind the very popular Draw Something game. The company had acquired OMGPOP for $180 million last year. “While this is the last day at @zynga for many @omgpop staff, we want to thank you for all love and awesomeness over the years!” OMGPOP tweeted from its official account. Surprisingly, a lot of the studio’s employees learnt of the shuttering from social networking websites. The former VP of Communications for OMGPOP, Ali Nicolas tweeted, “I learned via Facebook I was laid off today and @OMGPOP office is closed. Thanks @zynga for again reminding me how not to operate a business.”

Once a force to reckon with in social gaming, the maker of hit games such as FarmVille, CityVille and CastleVille seems to have fallen on hard times as the number of users kept dwindling. Recently, Zynga has had to shutter more than 15 games to concentrate on the handful of few hits it has. It recently launched mobile-based games such as Battlestone and Running with Friends. Surprisingly, Zynga had only just launched Draw Something 2 and now has gone on to shut down OMGPOP. After a series of massive layoffs, it looks like Zynga has its work cut-out in order to successfully make the transition to mobile gaming.

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