Zynga Inc. (ZNGA), the biggest maker of online social games, said it will cut 520 jobs, or 18 percent of its staff, and close some offices amid disappointing results from its titles outside the “FarmVille” series.
The reductions will save about $70 million to $80 million in pretax expenses annually, the San Francisco-based company said in a statement yesterday. 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.
Chief Executive Officer Mark Pincus is trimming costs as game players shift from titles on Facebook Inc. (FB), Zynga’s core business, to apps played on mobile devices. While the cuts may help buoy profits, the move puts pressure on Pincus to find new sources of growth, said Michael Pachter, an analyst at Wedbush Securities Inc.
“You can’t save your way to prosperity,” Pachter said in an interview. “They have to keep innovating.”
Chosen excerpts by Job Market Monitor
via Zynga Cuts 520 Jobs, Closes Offices as Games Underperform – Bloomberg.
Job Market Monitor 
Discussion
No comments yet.