San Mateo, Calif.-based Glu Mobile (NSDQ: GLUU) said it’s laying off an undisclosed number of employees with the hope of cutting expenses by about $13 million, or 19 percent compared to Q2 2008, according to a SEC filing. In addition, Glu’s CEO Greg Ballard is asking the board to reduce his salary by 25 percent, a move that sounds eerily like what is happening in the auto industry. The pay cut would reduce Ballard’s $375,000 annual salary by $93,750, according to the company. Ballard: “These decisions are difficult but necessary given the increasing economic headwinds facing our industry and the softening in consumer spending. By realigning our operations and resources worldwide, we are able to improve our financial performance in the near term while continuing to invest in key growth opportunities in the mobile games industry, especially surrounding high-end handsets and new platforms such as iPhone, Android and N-Gage.” Release.

When the company reported third-quarter earnings in early November, it said its cash balance was dwindling. By the end of the year, it expected to have about $17 million in cash, not including an $8 million credit facility. However, next year, the company will have to pay an additional $25 million in cash and stock to the shareholders of MIG, a Chinese mobile game company it acquired. The first installment is due in the first half of 2009. To help, the company said it had successfully reduced its expenses by 8 percent over the last few quarters, and forecasts cash-flow break even in the first half of the year, not including the payments. When the cost-cutting actions announced today are completed, the benefits will be fully realized in the first quarter, with 2009 non-GAAP operating expenses expected to be about $57 million. The company said restructuring charges in the fourth quarter will range between $625,000 and $675,000. In addition, the company expects to record a pre-tax, non-cash facility closure charge totaling up to $800,000.

Glu is not the only mobile gaming company that has had to trim its workforce, or watch its budgets closely. In general, Glu blames the economy for its problems, but also it says it was taken off guard by the success of the iPhone. It not only should have put more resources toward the new platform, but said the iPhone actually decreased its traditional mobile games business elsewhere because its typical customers left other carriers for AT&T (NYSE: T). Other companies, such as casual gaming publisher Oberon Media, are also feeling the tightening economy. In a memo we obtained, Oberon said it was freezing wages and new hiring, cutting back on travel budgets and reducing non-essential costs with the goal of reaching profitability by the second quarter 2009. Electronic Arts (NSDQ: ERTS) plans to shed 540 employees and THQ (NSDQ: THQI) said it will layoff about 250.

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