Zynga shares surge on layoff plans and growing revenue

Zynga building Image copyright Reuters
Image caption Zynga rose to prominence after its Facebook games, like Farmville, gained millions of users

Shares in online game maker Zynga surged more than 11% after the firm reported a smaller-than-expected loss and plans to cut costs by laying off 18% of its workforce.

Zynga said it lost $46.5m (£30.5m) in the first three months of 2015 but that revenue increased by 9% to $183m.

It also said it plans to release six-to-eight new games in 2015.

Last month, the Farmville game maker announced that founder Mark Pincus would return to lead the firm.

In announcing the layoffs - which would lead to the loss of 364 jobs but $100m in cost savings - Mr Pincus said in a statement: "This was a hard but necessary decision and I believe this plan puts us in the best long-term position for success."

Zynga has struggled after the early successes of its Facebook games like Farmville and Words with Friends. The company was late to switch to mobile games, and has struggled to come up with more hits.

In a crucial sign for investors, it said that it was finally attracting more users to its mobile offerings and that it was growing its casino gambling product.

Zynga said the number of customers using its mobile games daily has increased 18% from a year ago.

It also said that it would focus on five key areas, including casual games, action strategy games, and social casino products, so as not to spread its efforts too thinly.

Zynga launched its first strategy game for mobile, Empires and Allies, this week on the iOS and Android platforms.

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