Zynga Inc (NASDAQ:ZNGA) is shaking up its top leadership. The company announced that current CEO, Don Mattrick will step down and his place taken over by the company’s founder and current chairman, Mark Pincus. The changes are effective immediately. In addition to leaving as CEO, Mattrick will also vacate his board seat. Mattrick took over the leadership at the company back in July 2013.
Pincus, who is returning to help refocus Zynga Inc (NASDAQ:ZNGA) in the new phase of growth, founded the company in 2007 and hold a controlling stake the struggling games company.
Last year, Zynga Inc (NASDAQ:ZNGA) sales fell 21% from the previous year and the company lost $226 million.
Reactions to Pincus return
The return of Pincus has already attracted various views from analysts, with some saying that it becomes tricky when a controlling investor seems to think the CEO isn’t doing enough to turn around the company. Shares of Zynga declined following reports that Pincus was back to lead the company.
According to Michael Pachter, it would be great if Pincus droves things in the direction that Mattrick has focused them, but he conceded that the setback in the stock is no doubt a vote of no confidence in the leadership of Pincus. Still, Pachter believes that Pincus deserves to given the benefit of the doubt as he returns to steer the company he founded.
Challenges facing Zynga
Although Mattrick tried to steer Zynga Inc (NASDAQ:ZNGA) in the right direction, his exits leaves much to be done. Zynga has been unable to create blockbuster games that can replace its aging titles. The company is also facing growing competition from rivals such as King Digital Entertainment PLC (NYSE:KING), whose revenue was $2.26 billion in 2014 compared to Zynga’s $690 billion.
Saying bye to Mattrick
Mattrick, who was picked from Microsoft Corporation (NASDAQ:MSFT) to lead Zynga Inc (NASDAQ:ZNGA) in its transition to mobile, is expected to receive $4 million related to severance payment. He is also likely to receive another $1 million as bonus for 2015.