By Gerry Shih
SAN FRANCISCO (Reuters) - Zynga Inc, the game maker that has been struggling to retain players, announced on Monday its most dramatic cost-cutting measure to date, with a plan to slash nearly one-fifth of its work force.
Shares in Zynga were down 11.6 percent at just above $3 in mid-afternoon after resuming trade after a second trading halt.
The cut of roughly 520 jobs is expected to slightly improve Zynga's projected second-quarter results, with the company forecasting a net loss of between $39 million and $28.5 million.
Zynga said its second-quarter bookings are projected to be in the lower half of the outlook range provided in April.
The cuts, which include studio closures in multiple cities, will save $70 million to $80 million, according to the company.
"None of us ever expected to face a day like today, especially when so much of our culture has been about growth," Chief Executive Mark Pincus said in a memo to employees. "But I think we all know this is necessary to move forward.
"The scale that served us so well in building and delivering the leading social gaming service on the Web is now making it hard to successfully lead across mobile and multi-platform, which is where social games are going to be played," he said.
Since its high-profile initial public offering in December, 2011 following a period of runaway growth, Zynga has failed to replicate the success of its early hit titles on the Facebook platform. Gamers are also increasingly spending time on mobile devices, posing a challenge for a game maker that invested so heavily in publishing Facebook titles.
Pincus had acknowledged last fall that he would seek steep cost-cutting measures as Zynga's business crumbled.
Zynga's shares are trading more than 70 percent below its IPO price of $10.
(Reporting by Gerry Shih; Editing by Gary Hill and Leslie Adler)