Social gaming company known best for its creation of FarmVille, Zynga, announced they will lay off about 520 employees and shut down several offices worldwide.
According to Bloomberg.com, the company says cutting 18 percent of the San Francisco-based company's payroll by completed by August will save them between $70-$80 million in pre-tax expenses. Zynga is reported to 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."
"None of us ever expected to face a day like today, especially when so much of our culture has been about growth," said Zynga CEO Mark Pincus in a message to employees on 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 multi-platform, which is where social games are going to be played."
Though FarmVille has been Zynga's biggest moneymaker, the company's other games are reportedly "under performing."
According to the Wall Street Journal, the newer games have "failed to gain traction and financial results have slumped, due in part to declining exposure on Facebook Inc.'s (FB) social networking site, traditionally a primary platform."
"Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect," said Pincus, USA Today reported. "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."
Zynga has been cutting its staff since last October where they laid off more than 100 employees and got rid of 13 older games.
