As of tomorrow RockYou is cutting approximately 54% of its staff and is selling Playdemic back to its founders and disassociating from Cloudforest Expedition developer Loot Drop. Maybe you first heard rumors of impending layoffs immediately after now-ex SVP of Games Jonathan Knight left the company to join Zynga in September.

CEO Lisa Marino explains that the company is too big to be profitable at its current size and that certain intellectual property no longer lends itself to RockYou's vision for profitable social games. By spinning out Playdemic, RockYou effectively culls 17 members of its central studio and 56 more are impacted in its Redwood City, CA office. It's unclear from where the remaining 127 cuts will come.

"We made a lot of mistakes in the last 12 months," she says. "We built up a central studio that looks a lot like EA or Zynga with 45 heads in it when we really only needed 10 or 12. We developed two large-scale sim games — Social Life and Cloudforest Expedition — and Social Life was [canceled] in May and Cloudforest is in the process of being kicked back to Loot Drop. Playdemic's Gourmet Ranch is profitable, but the developer is not building the core content that we want."