San Francisco-based Zynga announced, Monday, in its investor report that 520 employees will be laid off which cuts 18 precent of the company's work global workforce.
The Words With Friends developer will also be closing offices down in New York, Los Angeles, Austin and Dallas, according to reports.
Workforce reductions is expected to be completed by August of this year.
According to the company, the efforts will result in an estimated $70 million to $80 million in pre-tax annualized cash expense savings. The report read that while its Farmville franchise continues to perform well, other games are underperforming.
This comes as Zynga is projected a net loss between $39 - $28.5 million even with layoffs and office closures.
Zynga founder and CEO Mark Pincus sent a letter expressing sorrow to employees affected by the layoffs. Pincus said that the impact "will be felt across every group in the company."
"None of us expected to face a day like today, especially when so much of our culture has been about growth," wrote Pincus. "These moves, while hard to face today, represent a proactive commitment to our mission of connecting the world through games."
Severance packages for those receiving pink slips will be offered as "they pursue their next professional steps," according to Pincus, who is optimistic about the company's upcoming plans.
"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," Pincus wrote.
Zynga is hoping to restructure it's development to mobile and touch screen gaming that it feels are "revolutionizing gaming."
"Our opportunity is to make mobile gaming truly social by offering people new, fun ways to meet, play and connect," wrote Pincus. "By reducing our cost structure today we will offer our teams the runway they need to take risks and develop these breakthrough new social experiences."
Last month, Zynga released "endless runner" game Running With Friends for iOS and Android.
