Take-Two Interactive Announces Workforce Reduction and Project Cancellations
In a significant shift for the gaming giant, Take-Two Interactive Software, known for the popular “Grand Theft Auto” series, has announced a workforce reduction that will affect approximately 5 percent of its employees. This translates to around 600 staff members facing layoffs as the company seeks to streamline operations amidst a broader industry trend of job cuts that has persisted for over two years.
The cost-reduction plan also includes the termination of several undisclosed projects. These canceled projects are part of a strategic move to tighten the company’s financial belt, with expected total charges reaching up to $200 million. Despite the cuts, Take-Two anticipates that these measures will yield more than $165 million in annual cost savings, a silver lining for the company’s fiscal health.
Following the announcement, Take-Two’s shares saw a modest uptick of 1 percent in extended trading, although they have experienced a nearly 10 percent decline since the beginning of the year. This decision places Take-Two in line with other industry players like Riot Games, Electronic Arts, and Sony Corp, all of which have made similar workforce reductions this year in response to a dip in consumer spending post-pandemic.
Research firm Newzoo projects that revenue growth for PC and console gaming will continue to lag behind pre-pandemic levels through 2026, as gaming hours decrease. The financial impact of the canceled projects is estimated to be as much as $140 million, with additional costs for severance and employee-related expenses expected to be up to $35 million. The company is also looking to cut back on office space as part of its cost-saving measures.
As of March 2023, Take-Two had 11,580 full-time employees and recently acquired Gearbox, the creators of “Borderlands,” for $460 million. Despite the current downsizing, Take-Two remains committed to developing the next installment of “Grand Theft Auto,” although there are speculations about a potential delay in its release.
