Shares of Zynga Inc. (NASDAQ: ZNGA) were halted for five minutes this afternoon as the company announced a layoff of about 520 employees that it said would be completed by August. Zynga, a leading maker of social media games, expects to realize annualized pre-tax savings of $70 to $80 million as a result.

The company will record a charge of $24 to $26 million in its second fiscal quarter and $2 to $5 million in the third quarter. Zynga also estimates a reversal of $15 million in stock-based compensation expenses in the second quarter.

Zynga also updated its outlook, now projecting a net loss of $28.5 to $39 million. The company re-affirmed its second quarter outlook for revenues in the range of $225 to $235 million and an adjusted EPS loss of $0.03 to $0.04 ($0.03 to $0.05 loss on a GAAP basis) and bookings of $180 to $190 million. The consensus estimate calls for an EPS loss of $0.03.

Shares are trading up about 0.3% at $3.41 in a 52-week range of $2.09 to $6.36

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