Zynga shares spike on restructuring news

Zynga reported results Wednesday that beat estimates and announced plans to restructure. About 18 percent of its global workforce will be laid off for planned savings of $100 million.

The social gaming company reported it had a first-quarter loss of 1 cent per share on bookings revenue of $167 million. Wall Street had expected a loss of 2 cents per share on $148 million in bookings revenue, according to consensus estimates from Thomson Reuters.

Shares of Zynga were up 6 percent in extended-trading hours.

The layoffs will affect about 364 jobs.

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The company said the number of daily active users was down from a year earlier, but up from the fourth quarter. It also announced second-quarter guidance that was in line with analysts' expectations for a loss of 2 cents.

"Over the years we've seen that tighter, more nimble teams can drive faster innovation and deliver more player value," said CEO Mark Pincus in a release.

"This was a hard but necessary decision and I believe this plan puts us in the best long-term position for success."

The San Francisco-based company said it expects to launch between six and eight mobile games this year, "with a continued investment in our future pipeline for 2016 and beyond."

Pedestrians walk in front of the Zynga headquarters in San Francisco.
David Paul Morris | Bloomberg | Getty Images
Pedestrians walk in front of the Zynga headquarters in San Francisco.

Pincus also said Zynga will leave sports games and instead focus on a narrower product lineup including the action and social casino areas.

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The company has been struggling for years with plummeting revenues as more gamers transition to smartphones. Three years ago the company was valued at $11 billion. Its stock market value now is $2.2 billion.

Zynga has been pouring money into mobile game development in an effort to remain relevant. However, revenue for the well-known "FarmVille" franchise fell from $9 million a month in mid-2013 to a little more than $2 million a month today, according to SuperData.

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The company is creator of popular gaming franchises including "FarmVille" and "Words With Friends."

Shares of San Francisco-based Zynga have plunged more than 30 percent over the past 12 months to $2.55.

—CNBC's Dominic Chu contributed to this report.

Clarification: Zynga reported bookings revenue of $167 million for the first quarter. The nature of that figure wasn't specified in an earlier version of this article.