Zynga guts 18% of staff, shutters offices
Zynga (NASDAQ:ZNGA) is laying off 18 percent of its workforce, or 520 employees, by August. The gaming company is also closing its offices in New York, Los Angeles and Dallas, reported All Things D. In all, the cuts are expected to save the company an estimated $70 to $80 million.
"These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games. Mobile and touch screens are revolutionizing gaming. Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect. By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences," wrote CEO Mark Pincus in a letter to Zynga employees.
Pincus noted that the layoffs would be felt across all groups in the company.
Zynga also lowered its outlook for the quarter to a net loss of $39 million to $28.5 million. In addition Zynga noted that while its Farmville games continue to perform well, its other games are underperforming.
Zynga's last quarter was light on new releases as the company is still in what Pincus deemed a "transitional stage." In the first quarter Zynga's revenue dropped 18 percent year-over-year to $264 million, and Zynga's mobile engagement metrics also took a dive, with daily active users falling from 65 million to 52 million in the year-ago quarter.
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