Zynga Inc (ZNGA) Buys Mobile Game Maker, Lower 15% Workforce

Zynga Inc (NASDAQ:ZNGA) is again planning to lay off 15% of its employees to turnaround its ailing fortunes. The once popular game maker has been struggling in recent times, and slashed work-force in the past few years also. Zynga in its 2013 fourth quarter earnings report on Thursday said it would slash 15% of its workforce. The move is a part of the cost reduction plan with the help of which the game maker plans to save roughly $35 million this year.

“We don’t take these decisions lightly but we believe these actions will allow us to create a clearer, faster path to win,” said Mattrick. The CEO added that such decisions are extremely difficult to take, but are important to improve the performance, and “create a new foundation for future growth.”

Zynga lowers headcount further

Don Mattrick after taking over the post of CEO from founder Mark Pincus, has lowered head count, closed the loss making games and altered the middle management in a bid to turnaround the company.

The latest move from the game maker will affect 314 employees, adding to a toll of 520 staff last June or 18% of the workforce. Zynga Inc (NASDAQ:ZNGA) now employs around 2,000 employees.

For the fourth quarter, Zynga posted a loss of 25.2 million or 3 cents a share on revenues of $176.4 million, which is a decrease of 43.3% from the same period last year. For the full year, the game maker’s revenue came in at $873.3 million, which is a decrease of 32% from the last year. Zynga was able to narrow its net loss from 209.4 million in 2012 to $37 million.

Increasing focus on mobile gaming

Apart from lowering the headcount, Zynga Inc (NASDAQ:ZNGA) also announced the acquisition of games developer NaturalMotion, a mobile game maker famous for “Clumsy Ninja.” The acquisition reflects that Zynga is focusing more on the mobile market instead of relying on social media networks.

In an email to employees, Zynga wrote “NaturalMotion expands Zynga’s creative pipeline, accelerates our mobile growth, and brings next-generation technology and tools to Zynga that will fast-track our ability to deliver consumers more hit games.” The CEO added that the acquisition offers a huge opportunity to redefine the gaming industry, and “deliver consumers blockbuster entertainment experiences.”