Zynga announces more job cuts and expects wider losses
Games developer Zynga has said it plans to cut 520 jobs and warned that it expects wider losses than it previously estimated.
The cuts, which represent about 18% of its workforce, come after the company shed 5% of its staff in October.
Zynga is one of the pioneers of social gaming but has struggled to replicate the success of its Farmville series.
It said it now expects to make a loss of between $28.5m to $39m (£18.6m to £25m) in the April to June quarter.
That is worse than the projection of a loss of between $26.5m and $36.5m the company had issued earlier this year.
The firm also warned that sales of in-game virtual goods were likely to come in at the lower end of its estimate.
The company said that the latest move, which also includes shutting some offices, would help it save between $70m to $80m in annual costs.
"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,'' Mark Pincus, chief executive of Zynga said in a blog post.
However, some analysts said that cutting costs was not enough to boost investor confidence and the company needed to find a way to increase revenues.
"You can't save your way to prosperity," said Michael Pachter, an analyst with Wedbush Securities.
"The market is telling you that it's not confident that revenues are going to grow.''
The announcements resulted in a sharp decline in shares of Zynga and trading in its stock was halted twice on Monday on the Nasdaq stock exchange.
Its shares ended the day on Monday at $2.99, down by 12%. They have plunged nearly 50% over the past 12 months.