![]() Tuesday’s cuts were presaged on October 4, when Zynga slashed its 2012 outlook and warned investors that it would record a steep drop in sequential quarterly revenues for the first time since its December initial public offering. The memo came on the eve of Zynga’s earnings report on Wednesday, when Pincus and Chief Financial Officer David Wehner are expected to provide Wall Street with more comprehensive details about the company’s overhaul strategy. ![]() ![]() In March, Pincus made a gamble to acquire game studio OMGPOP for $180 million before acknowledging this month that the deal didn’t pan out, leading to a $90 million writedown. Pincus said the cuts would accompany a regime of “more stringent budget and resource allocation around new games and partner projects,” hinting at a fundamental change for a company that was known for expanding aggressively through hires and acquisition deals before it went public to fanfare last December. “This is the most painful part of an overall cost reduction plan that also includes significant cuts in spending on data hosting, advertising and outside services, primarily contractors,” Pincus wrote in his memo. The company, which is trying to arrest a steep decline in earnings as users gradually migrate onto mobile devices or rival games, plans to “sunset” 13 unspecified older titles, Chief Executive Mark Pincus said in a staff memo on Tuesday that was published on the company blog. The corporate logo of Zynga Inc, the social network game development company, is shown at its headquarters in San Francisco, California April 26, 2012.
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