Thu, Oct 25, 2012 - Page 15 News List

Zynga Inc to cut 5 percent of its staff, dropping 13 games

AP, PORTLAND, Oregon

Online game company Zynga Inc is eliminating games, studios and jobs in a bid to cut costs.

The maker of social-media games including FarmVille and Texas HoldEm Poker said on Tuesday that it will cut about 5 percent of its full-time workforce. It’s the first-ever round of layoffs at Zynga, which is based in San Francisco and has about 3,200 employees.

Zynga also said it will get rid of 13 older games and reduce its investment in The Ville. It will close its studio in Boston and may close studios in Japan and the UK. It runs 18 studios worldwide.

Its slumping stock rose more than 3 percent in aftermarket trading following the announcement, which came a day ahead of Zynga’s third-quarter earnings report.

The stock also likely got a boost from a better-than-expected earnings report on Tuesday by Facebook Inc. Zynga is by far the No. 1 gaming company on Facebook.

Zynga said earlier this month that it expected to post a third-quarter loss due to weak demand for some of its titles. It said its revenues would likely be nearly flat compared to the same period last year.

The company also previously announced that it would adopt some broad cost-cutting measures to help improve its performance.

CEO Mark Pincus said that the job cuts were the most painful part of the overall cost-reduction plan, which also includes significant cuts in spending on data hosting, advertising and use of contractors.

Zynga’s shares rose US$0.07 to US$2.27 in after-hours trading. The company went public in December last year at US$10 per share and its stock price peaked in March at US$15.91. The stock has lost about 85 percent of its value since then.

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