Zynga, the biggest maker of online social games, said it will cut 520 jobs, or 18% of its staff, and close some offices amid disappointing results from its titles outside the "Farmville" series.
The reductions will save an estimated $70 million to $80 million in pretax expenses annually, the San Francisco-based company said today in a statement. The cuts will be completed by August, and will result in restructuring charges of $24 million to $26 million in the second quarter and $2 million to $5 million in the third quarter.
Zynga will also record about a $15 million reversal of stock-based expenses because of the job reduction, and said the net loss in the current period will be $28.5 million to $39 million, including the costs of the restructuring.
"While our Farmville franchise continues to perform well, other games are underperforming," the company said in the statement. Zynga's most popular current game is "Farmville 2," followed by "Texas HoldEm Poker," according to App Data.
Zynga is trying to navigate a decline in desktop-based playing and consumers' increasing turn toward mobile devices. Last month it pitched ad buyers at the Digital Content NewFronts, talking up mobile video ads as an important focus for the company.
All Things D reported the approaching layoffs earlier this afternoon.
~ Bloomberg News ~