Zynga Announces Layoffs As Part of Restructuring Effort
Zynga reported an earnings beat on Wednesday and laid out plans to restructure the social gaming company. About 18 percent of the global workforce will be laid off for planned savings of $100 million.
The company reported a loss of 1 cent per share on revenue of $167 million. Wall Street had expected the company to deliver a loss of 2 cents per share on $148 million in bookings revenue, according to consensus estimates from Thomson Reuters.
Shares of Zynga were up about 7 percent in extended trading hours.
The layoffs will affect about 364 jobs.
Users were down from a year ago, but were up once again from the fourth-quarter of 2014. Zynga also announced second-quarter guidance that was in line with analysts' expectations of a loss of 2 cents.
"Over the years we've seen that tighter, more nimble teams can drive faster innovation and deliver more player value," said CEO Mark Pincus in a press release.
"This was a hard but necessary decision and I believe this plan puts us in the best long term position for success."
The company said it expects to launch between 6 to 8 new mobile games this year, "with a continued investment in our future pipeline for 2016 and beyond."
Pincus also said the company will leave sports games and instead focus on a narrower product lineup including action and social casino.
Zynga has been struggling for years with plummeting revenues as more gamers transition to smartphones. Three years ago the company was valued at $11 billion. It's stock market value now is $2.2 billion.
The company has been pouring money into mobile game development in a desperate effort to remain relevant. However, revenue for the well-known FarmVille franchise fell from $9 million a month in mid-2013 to a little more than $2 million a month today, according to SuperData.
The social game developer is creator of popular gaming franchises including FarmVille and Words With Friends.
Shares of San Francisco-based Zynga have plunged more than 30 percent over the past 12 months to $2.55.
—CNBC's Dominic Chu contributed to this report.