The company, based here, said it will lay off 18% of its workforce worldwide and shutter offices. It did not say where, but sources said they are in Los Angeles, Dallas and New York. Zynga says the move, which should be completed by August, will save it $70 million to $80 million.
Zynga said it anticipates a second-quarter loss of $28.5 million to $39 million.
The news sent Zynga shares tumbling 12%, to $2.99.»None of us ever expected to face a day like today, especially when so much of our culture has been about growth,» Zynga CEO Mark Pincus said in an e-mail message to employees Monday. «But I think we all know this is necessary to move forward.
«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,» Pincus said. The largest layoff in the nearly 6-year history of Zynga is its latest blow. The company has endured player defections, increased competition amid slumping revenue, and the elimination of 18 titles over the past six months. Last fall, Zynga announced about 150 job cuts.
That has caused Zynga to focus more on mobile and so-called midcore games in hopes of changing its course. Zynga defines midcore as games that «blend the depth of hardcore games, traditionally played on a PC or console, with the approachability and accessibility of casual games that are mobile, free-to-play and social,» says Steve Parkis, senior vice president of games, midcore, at Zynga. While Zynga struggles to maintain users, the number of people in the U.S. who play games online, on their phones or through social networks continues to grow. That figure is expected to grow 5.6% to reach 80.3 million this year, according to eMarketer.
