Zynga is set to lay off 364 staff as part of its plans to stem its losses and move back into profit.
The job losses represent 18 per cent of its entire workforce. Layoffs are expected to be completed by the end of the year with anticipated savings of $45m.
The firm also plans to end spend on outside and centralised serviced by the third quarter of 2016, saving it a further $55m a year. In total it hopes to cut $100m in costs.
The news comes as Zynga reported losses of $46m for the three months ending March 31st. This was down however from 2014 when the company’s losses hit $61m. Total revenues hit $183m, up from the same period in 2014 but down five per cent compared to the last quarter. Zynga anticipates revenues between $175m to $190m for the second quarter.
Monthly active users for Zynga’s games were up three per cent to 1.1m during the quarter, but down from the 1.3m reported last year. Daily active users were up four per cent from Q4 in 2014, but down 3m from the same period in 2014.
"Over the years we’ve seen that tighter, more nimble teams can drive faster innovation and deliver more player value,” said Zynga CEO Mark Pincus.
“As a result, today we announced a cost reduction program to focus, simplify and align us against our most promising opportunities. We expect these cost reductions to generate $100 million in annualized savings. We are reducing our workforce by 364 people or approximately 18 per cent, decreasing our outside services and reducing our central functions. This was a hard but necessary decision and I believe this plan puts us in the best long term position for success."
The news company restructuring comes shortly after Don Mattrick stepped down as CEO and former boss Mark Pincus returned to the position he previously held.
Update: Mark Pincus has said the company’s Orlando studio will be closed as part of its "cost reduction programme".
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