San Francisco-based social game studio Zynga on Wednesday announced an extensive cost-reduction plan that the company says should help it save around $100 million in the short-term.
As part of the process, the company revealed plans to lay off about 18 percent of its current global workforce.
A total of 364 people are losing their jobs. Zynga estimates that the layoffs will be completed by the end of its fiscal year and should result in about $45 million in annualized savings.
In addition, Zynga's restructuring process includes "additional cost reduction measures, including lowering costs and eliminating spend on outside and centralized services." This should result in another $55 million in savings, the company said.
Zynga CEO Mark Pincus, who stepped into the role just last month after former Xbox boss Don Mattrick left, released a statement on the changes.
"For our people, we need to create an empowered, entrepreneurial culture that fosters more creativity and innovation," he said. "Over the years we've seen that tighter, more nimble teams can drive faster innovation and del iver more player value. As a result, today we announced a cost reduction program to focus, simplify and align us against our most promising opportunities."
"This was a hard but necessary decision and I believe this plan puts us in the best long term position for success."
The cost-saving plan was announced Wednesday as part of Zynga's latest earnin gs report for the quarter ended March 31. It was tough quarter, as the FarmVille company posted another net loss. On a GAAP basis, Zynga lost $46.5 million, while the non-GAAP loss was $7 million. Meanwhile, Zynga monthly active payers, daily active users, monthly active users, and monthly unique users all fell year-over-year.
However, total Zynga revenue rose 9 percent to $183 million during the quarter.
Investors are responding positively to Zynga's cost-saving moves, as shares of the company are trending upw ards in after-hours trading.
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