Social gaming company Zynga said Monday that it would layoff 520 employees, approximately 18 percent of its global workforce, and close several offices including the one in L.A., in a bid to slash expenses.
Zynga has approximately 250 million monthly active users playing its games, including the popular "Words With Friends" and "Farmville." However, many other games are underperforming.
The reduction of staff and closure of offices will result in an estimated $70 to $80 million in pre-tax annualized cash expense savings. The layoffs are expected to be "substantially complete" by August, the company said in a statement.
In a note to employees, CEO Mark Pincus said, "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."
Zynga's projects net loss to be in the range of $39 million to $28.5 million, according to the press release. Bookings are projected to be in the lower half of the outlook range provided in the corporations April 24, 2013 first quarter earnings release. The company re-affirmed the second quarter 2013 outlook provided on April 24, 2013 for Revenue and earnings per share.
Last fall, Zynga laid off five percent of its staff after a weak third quarter.
- Investment & Company Information