Zynga cutting 18% of its workforce and closing offices

Zynga is culling 18% of its workforce as part of a cost reduction measure by the social games giant.

The total reduction in workforce is estimated at approximately 520 employees and the lay offs are expected to be completed by August 2013. Employees affected are being offered generous severance packages according to Zynga chief executive Mark Pincus.

According to AllThingsD, the offices Zynga also stated it is going to close include its New York, Los Angeles, Austin and Dallas studios. Overall, the cost cutting measures aim to save between $70m and $80m in pre-tax annualised cash expenses.

' None of us ever expected to face a day like today, especially when so much of our culture has been about growth. But I think we all know this is necessary to move forward,' said Pincus in a letter to staff. ' Although these are hard decisions, I’m confident that our strategy of building leading franchises and supporting them with the largest network is the right one for the long term. I’m encouraged by our recent progress.

Pincus also says in his letter that the company intends to focus more on mobile and touch screen devices and that the cuts will help Zynga move towards this.

In the statement issued by Zynga announcing the cut, the company also updated the forecast for its second quarter financial results. It expects to see a net loss of between $28.5m and $39m and mentions that while its Farmville titles are doing well, its other games are under-performing.