Zynga today laid off 18 percent of its workforce, eliminating 520 positions.
“None of us ever expected to face a day like today, especially when so much of our culture has been about growth… The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multiplatform, which is where social games are going to be played,” said CEO Mark Pincus in an internal memo to employees.
The moves will reduce costs by $70 – $80 million per year, the company said.
Zynga also updated its predictions for Wall Street analysts to show a fewer in-app sales and a net loss roughly 9 percent greater for the second quarter than it had previously predicted, even after factoring in the layoffs.
The social games company has struggled to adjust as social gaming’s popularity dwindled on Facebook and Facebook, facing public scrutiny for its close ties with Zynga, distanced itself from some of its revenue-sharing deals with the company.
Zynga, like many other digital content providers, has also struggled to monetize as effectively as users move to mobile devices.