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Zynga shares up 11% following 364 job cuts

Zynga shares up 11% following 364 job cuts

After announcing the axing of 364 jobs, shares in Zynga (NASDAQ: ZNGA) surged by more than 11 percent.

On the back of $46.5 million quarterly loss, the firm revealed it would be laying off 18 percent of its workforce.

The company is expecting to save over $40 million a year from the job cuts, which will be running until the fourth quarter of 2015.

Cost-saving

In a statement, the company explained that it has announced “a cost reduction plan expected to generate pre-tax savings of approximately $100 million, excluding an estimated $18 million to $22 million pre-tax restructuring charge in the second quarter of 2015.”

“As part of the plan, Zynga expects to complete a reduction of approximately 18% of our current workforce across its studios, including contractors, and implement additional cost reduction measures, including lowering costs and eliminating spend on outside and centralized services.”

Last month saw confirmation that Zynga founder Mark Pincus would be returning to the company as CEO once more, while it plans to release between six and eight new games this year.

While it’s bad news for 18 percent of Zynga’s workforce, the decisions have clearly buoyed investors’ faith in the FarmVille creator.

Famously late to the mobile gaming boat, Zynga has struggled to come up with relevant hits.

However, with a reported 63 percent of its bookings in the first quarter having come from mobile, shares are rising once more - even as its employee numbers fall.


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