Zynga (ZNGA) Stock Gains After Announcing Job Cuts

NEW YORK (TheStreet) -- Shares of Zynga (ZNGA) were up 4.2% to $2.72 on Thursday morning after the social game publisher announced it will cut 18% of its staff as it narrows its focus.

During the company's first quarter earnings call, Zynga CEO Mark Pincus said the company will cut 384 jobs by the end of 2015 

The company expects to take charges of $18 million to $22 million in the second quarter as a result of the cuts. The job cuts will result in annualized savings of about $45 million excluding the charges, and the company plans to save another $55 million in other ways, including switching its services over to Amazon.com (AMZN) services.

Pincus told the Wall Street Journal the company was "trying to do too much." The CEO plans to focus the company on most popular areas such as casino games.

Pincus returned to the role of CEO at Zynga in April after two years, taking over the position from former Microsoft (MSFT) Xbox head Don Mattrick.

TheStreet Ratings team rates ZYNGA INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate ZYNGA INC (ZNGA) a SELL. This is driven by several weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow, generally disappointing historical performance in the stock itself and feeble growth in its earnings per share."

If you liked this article you might like

Now You're Hearing Apple Roar: Market Recon

Apple Rally Could Boost Dow to 22,000 - 5 Things You Must Know Before the Market Opens

Tesla and Apple Better Deliver Big-Time or Look Out Below -- Week Ahead

Midday Report: SiriusXM Makes Pandora Investment; U.S. Stocks at New Records

Zynga Stock Jumps on Morgan Stanley Upgrade