Zynga cuts 520 jobs as losses widen

04/06/2013

Zynga plans to axe a further 520 jobs, amid warnings that the Farmville games developer expects wider losses than it previously estimated.

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The cuts, which represent about 18% of its workforce, come as Zynga expects to make a loss of between $28.5m to $39m (£18.6m to £25m) in the April to June quarter.

That is worse than the projection of a loss of between $26.5m and $36.5m the company had issued earlier this year.

Last October, Zynga cut 5% of its workforce as the social gaming pioneer struggled to replicate the success of its Farmville series.

The firm also warned that sales of in-game virtual goods were likely to come in at the lower end of its estimate.

The company said that the latest move, which also includes shutting some offices, would help it save between $70m to $80m in annual costs.

"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,'' Mark Pincus, chief executive of Zynga said in a blog post.

The announcements resulted in a sharp decline in shares of Zynga and trading in its stock was halted twice on Monday on the Nasdaq stock exchange.

Its shares ended the day on Monday at $2.99, down by 12%. They have plunged nearly 50% over the past 12 months.

Read the official blog here

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