Chicago-based Mortal Kombat house Midway Games said Monday that it will be laying off 90 of its 130 workers at its Austin studio.

The layoffs come after a net loss of $34.8 million for the company's June quarter. The firm said the reduction represents 10 percent of the company's global workforce.

The reduction results from Midway's decision to cancel a to-be-announced project, as the developer aims to put resources towards games with "the highest chance of success."

A regulatory filing reads, "The workforce reduction relates to product development and related employees staffed on the development of a specific game, which did not meet the Company’s expectations and has been canceled."

That cancellation resulted in an impairment and write down of approximately $10 million due to development costs, the company said.

Severance pay for laid off workers means Midway will also incur an immediate charge of around $1.2 million.

The majority of the layoffs will occur by the end of August, Midway said. The decision was made last Friday.

Midway said the Austin facility, which is responsible for 2007's poorly-received Blacksite: Area 51 (pictured), will continue to house the firm's Central Outsourcing Group and two teams working on unnamed prototype projects related to new properties.

In a press statement, interim CEO Matt Booty called the decision a "very difficult" one.

Recently, reports emerged stating that the head of Midway Chicago Mike Bilder had left the company, along with other high-profile figures such as marketing and PR execs Mona Hamilton and Reilly Brennan.

Midway also raised its third quarter loss expectations from a net loss of 37 cents per share to 49 cents per share.