Zynga’s cost reduction plan involves laying off 150 employees.
Expectations for Facebook social game maker Zynga’s third quarter 2012 financial results were dampened when CEO Mark Pincus warned that revenues were down , and now it’s official: Zynga lost $52.7 million, net. Bookings, aka revenue due from contracts, and online gaming revenue are both down – bookings by as much as 15% when compared to the previous quarter – and Zynga’s cost reduction plan, outlined in the report, involves shedding 150 employees.
The job losses will be part of the labor reductions already seen this month, and represent about 5% of Zynga’s work force. The report also mentioned rationalizing its product pipeline and consolidating “certain facilities” as other ways Zynga could save money.
The drastic drop in net revenue was blamed in part on $95.5 million worth of expenses arising from the acquisition of Draw Something creator OMGPOP, as well as $37.8 million stock-based expense related to employee compensation. Zynga expects total stock-based expense for 2012 to be somewhere in the region of $310-325 million.
Speaking of stock, Zynga wants its stock back, and its share repurchase program will be repurchasing up to $200 million worth of common stock. The timing of the repurchase will depend on “market conditions,” according to the announcement; as of time of writing, Zynga’s stock is trading at $2.129 per share. The IPO price in December 2011 was $10 per share; before the rumblings of discontent earlier this year, it had flirted with $12-15 per.
Source: NASDAQ Globe Newswire