Zynga Cuts Headcount by a Fifth

Game publisher Zynga, the company behind Farmville, Draw Something and Words with Friends, has cut its global workforce by 18 per cent.

The company announced it would be laying off approximately 520 employees, as well as the closure of various office locations, in an attempt to save $70-80m.

Even with the effect of these cuts, Zynga projects a net loss of $28.5-39m for Q2, 2013.

Back in March last year, Zynga acquired OMGPOP, developer of mobile hit Draw Something, for $183m (£120m) – an investment which the company had difficulty recouping.

However, theres still the potential for a comeback, and mobile will likely be the key. The OMGPOP acquisition helped boost its mobile users, with Zynga announcing in its 2012 end of year results that 24 per cent of monthly users came from mobile. And those users are spending money – six months ago, Zynga had 15 titles in the top 300 grossing iPhone apps, and nine on Android.

So its entirely possible that ruthlessly cutting costs in this way will enable Zynga to make the most of those revenues and bounce back – only time will tell.