Zynga Inc. (NASDAQ: ZNGA) plans to slash roughly 520 jobs, or nearly one-fifth of its workforce, the San Francisco-based online game maker said Monday.
The company updated its projected net loss for the second quarter to between $39 million and $28.5 million U.S.
The cuts, which include studio closures in multiple cities, would save $70 million to $80 million U.S. , according to the company.
The "Farmville" maker didn't say which offices will be shuttered, but the tech blog AllThingsD reported that New York, Los Angeles and Dallas are on the chopping block.
The company reaffirmed its revenue and earnings per share guidance for both the current quarter and the full year. But Zynga now expects a net loss of between $28.5 million and $39 million U.S. during the current quarter, worse than the $27.6-million U.S. loss analysts surveyed by Thomson Reuters had been expecting.
It's been clear for months that the social gaming company is in trouble. The December 2011 IPO was disappointing, Zynga's purchase of "Draw Something" maker OMGPOP was disastrous, and many of the company's games have been underperforming.
In October 2012, Zynga cut 5% of its employees, closed its Boston offices and proposed closures of its Japan and U.K. offices. Worse, Zynga also announced it would be shuttering about a dozen games -- and about five more have been shut down since then.
Zynga stock reacted to the news by ramping down its price by 41 cents, or 12.1%, to $2.99 U.S., in a 52-week trading range of $2.09 to $6.36 U.S.
