Social gaming firm Zynga plans to cut 520 jobs in the face of greater losses than previously estimated.
Earlier this year, the Farmville producer projected a loss of between $26.5m and $36.5m in the second quarter of 2013, but now expects to make a loss of between $28.5m and $39m.
“While our Farmville franchise continues to perform well, other games are underperforming,” the company stated.
The 18% reduction in staff comes on top of a previous 5% cut to the workforce seven months ago.
Together with some office closures, the move is expected to save up to $80m in annual costs.
The cuts are being justified as a way to capitalise on the growth of mobile devices and touchscreens that “are revolutionising gaming”, according to Zynga chief executive Mark Pincus.
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"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,'' he wrote in a blog post.
But analysts have said that cutting costs is not enough to boost investor confidence and that Zynga needs to find a way to increase revenues, according to the BBC.
News of the latest round of staff cuts resulted in a sharp decline in Zynga shares, and trading in its stock was halted twice on the Nasdaq stock exchange on 3 June.
Zynga shares closed at $2.99 on 3 June, down 12% on the day and nearly 50% lower than the same time last year.