Zynga attacks costs, to slash headcount by 15 percent

SAN FRANCISCO Fri Jan 31, 2014 3:49am IST

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012. REUTERS/Robert Galbraith/Files

The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.

Credit: Reuters/Robert Galbraith/Files

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SAN FRANCISCO (Reuters) - Video game maker Zynga Inc (ZNGA.O) said on Thursday it would slash its workforce by 15 percent and posted a narrower-than expected quarterly loss, sending shares up 20 percent.

The San Francisco-based game company, known for its "Farmville" game, is expected to cut about 314 jobs as part of an expanded cost savings plan, the company said.

Shares in Zynga were halted briefly after its announcement and then rose to $4.26 after closing at $3.56 on the Nasdaq on Thursday.

Zynga's core business continued to deteriorate, but not as quickly Wall Street feared. For the quarter ended Dec 31, Zynga's revenue fell to $176.4 million from $311.16 million a year prior, compared to analysts' average estimate of $141.1 million, according to Thomson Reuters I/B/E/S.

Excluding certain items, it reported a net loss per share of 3 cents, slightly better than Wall Street view of a 4-cent loss per share, according to Thomson Reuters I/B/E/S.

The company forecast first-quarter revenue in the range of $155 million to $165 million.

Zynga said that it acquired mobile game developer NaturalMotion, which has created games like "Clumsy Ninja" for Apple mobile devices, for $527 million in cash and stock in a bid to grow its mobile game revenue.

The game publisher, once among the hottest tech companies with rapid revenue growth from popular Facebook-based games, was caught off guard as the games industry saw a boom in mobile games. The company has renewed its focus on transitioning to smartphones and tablet titles, the increasingly preferred format for casual gamers.

(Reporting by Malathi Nayak; Editing by Andre Grenon, Nick Zieminski and Meredith Mazzilli)


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