Social game developer Zynga Inc. has announced its plans to lay off about 520 employees, or about one fifth of its workforce, as of its larger restructuring programme in order to shift focus to mobile business.
Due to weak bookings and earnings falling below expectations, the company has been making cuts in the recent past.
In a memo to the staff, Zynga founder and CEO said: “None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward.”
Zynga, which is the largest games publisher on Facebook, intends to save anywhere between $70m and $80m annually through job cuts and closure of several offices.
The company plans to close offices in New York City, Dallas and Los Angeles. Last year, it shut down studios in Boston, UK, and Japan.
The firm, which currently has about 2,900 employees across its worldwide operations, employed over 2,000 people at its San Francisco headquarters alone when the business was at its peak.
Most of the layoffs are expected to happen by August. Costs for restructuring is expected to be about $25m, which will reflect in the second quarter, while another $2m-$5m will figure in the third quarter.
Over the last few years, Zynga has been struggling to retain its players from shifting to mobile devices and rival games.
Zynga has revised its outlook for the second quarter from a net loss of $26.5m-$36.5m to $28.5m-$39m and expects bookings to be down 20 per cent from the first quarter.