Zynga buying 'Clumsy Ninja' maker, laying off 15 percent of employees in turnaround plan
SAN FRANCISCO (AP) — Zynga Inc. said Thursday it was buying NaturalMotion, the company behind the hit mobile games "CSR Racing" and "Clumsy Ninja," while cutting 15 percent of its workforce in a turnaround effort.
The company moved up its earnings results by a full week to coincide with announcing the $527 million acquisition and the job cuts. Investors sent shares up 77 cents, or 22 percent, to $4.33 in after-hours trading.
Zynga has been cutting jobs and posting losses as game players increasingly turn to smartphones and tablets. The company's biggest hits, like "FarmVille" and "Mafia Wars," have mostly been played on desktop and laptop computers.
"We have an ambitious agenda and we are moving quickly to add capabilities that are complementary and strategic," said CEO Don Mattrick in a statement. Mattrick left Microsoft's Xbox division last July to take over Zynga after founder Mark Pincus' ouster.
The company's loss in the October-December quarter came to $25.2 million, or 3 cents per share. That's down from a loss of $48.6 million, or 6 cents per share, in the same months the year before. Analysts expected a loss of 4 cents per share. Sales plunged 43 percent to $176.4 million, worse than the $183.5 million expected by analysts polled by FactSet.
But it hopes to counteract those losses with the $527 million cash-and-stock purchase of mobile game maker NaturalMotion.
The most recent job cuts come to 314 employees, and Zynga expects to save $33 million to $35 million this year from them.
Zynga also said it expected a full-year profit of 1 to 3 cents per share, above the 4 cents per share loss analysts were forecasting.