Zynga’s stock has recovered most of its value following the announcement that CEO Don Mattrick would step down with Mark Pincus taking his place. Zynga’s stock fell heavily with Pincus’ return, down to a low of $2.38 from its $2.90.
Investors are responding well to Zynga’s latest quarterly results, in which the company announced severe downsizing. As part of proposed cuts, Zynga will shut down its $100 million dollar data centers and switch over to Amazon. In addition, the company will lay off 364 employees, nearly 20% of its workforce,
We need to be more resourceful in how we manage our costs in order to fund our investments in new games, people and data and analytics. We’ve overburdened our game teams with complexity and centralized expenditure.
The cuts are expected to save $100 million annually.
For the first quarter of 2015, Zynga’s daily active users remained flat (25 million) while monthly active users fell (100 from 108 million) and monthly unique users grew (73 million from 71 million). Revenue fell further, however earnings were higher than expected.
(Source: Zynga)
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